Human Capital, Female Employment and Electricity: Evidence from the Early 20th-Century United States

The Review of Economic Studies, 2024

This paper revisits the link between electrification and the rise in female labor force participation (LFP), and presents  theoretical and empirical evidence showing that electrification triggered a rise in female LFP by increasing market opportunities for skilled women. I formalize my theory in an overlapping generations model and find that my mechanism explains one quarter of the rise in female LFP during the rollout of electricity in the United States (1880-1940), and matches the slow decline in female home-production hours during this period. I then present micro-evidence supporting my theory using newly digitized data on the early electrification of the United States.

Risk-Taking Adaptation to Macroeconomic Experiences (with Remy Levin)     

Accepted, Journal of Political Economy Microeconomics

We study how lifetime experiences of macroeconomic volatility shape individual risk attitudes. We build a Bayesian model where risk aversion endogenously adapts to agents’ beliefs about an exogenous income process. We combine panel data from Indonesia and Mexico containing elicited measures of risk aversion with state-level real GDP growth time series capturing individuals’ lifetime macroeconomic experiences. Consistent with the model's predictions, we find that measured risk aversion increases with macroeconomic volatility, and this is a first-order contributor to changes in risk attitudes. These results are robust to many alternate specifications and controls and extend to risk-taking behavior in other domains.

Revisiting the Link between Electrification and Fertility: Evidence from the Early 20th-Century United States

Revise & Resubmit, Journal of Economic History

The decline in fertility occurring throughout the first half of the 20th century in the United States and preceding the baby boom remains largely unexplored. This paper presents empirical and theoretical evidence linking this decline to the spread of electricity. Using data on early electrification efforts, I empirically disentangle two channels linking electrification and fertility: the introduction of time-saving appliances that reduce the time needed for child-rearing; and the rise in female wages which raises the opportunity cost of childcare. I then use these empirical estimates to calibrate a model that features both channels and quantifies the aggregate impact of electrification on fertility. I find that electrification explains 3.1% of the overall fertility decline in 1900-1940 in the US, corresponding to a magnitude of 0.047 fewer children born to each woman, and that this decline is driven by young childless women who can reap the labor market gains of electricity.

How do Workers Learn? Theory and Evidence on the Roots of Lifecycle Human Capital Accumulation (with Xiao Ma and Alejandro Nakab) 

How do the sources of worker learning change over the lifecycle, and how do these changes impact human capital and wages? Using data from Germany and the US, we document that workers' reliance on internal learning (learning from coworkers) decreases with experience, while external learning (on-the-job training) follows an inverted U-shape. Based on this evidence, we develop a search model featuring multiple learning sources whose benefits evolve as workers age and accumulate human capital. Quantitative results indicate that the interaction between internal and external learning is key to understanding lifecycle wage dynamics and the effects of learning policies and shocks.

Who Pays for Training? Theory and Evidence on Firm-Level Differences in Training Investments (with Xiao Ma and Alejandro Nakab)

We investigate how on-the-job training varies with firm characteristics and how this informs the distribution of training costs between firms and workers. Using data from over 100 countries, we document that smaller firms consistently offer fewer training opportunities to their workers. Drawing on administrative data from China and Mexico, we identify differences in labor share and productivity levels as key factors explaining this pattern. We then build a general equilibrium model with various training cost-sharing schemes and show that only those in which firms bear a substantial share of training costs after hiring align with the empirical evidence. A quantitative version of the model calibrated to the US reveals significant inefficiencies in training provision, particularly among smaller firms, and suggests that (1) optimal training subsidies are higher for smaller firms, though even a uniform subsidy can raise net output by 7%; and (2) increasing the labor market share of larger firms can significantly impact on-the-job human capital formation.

The Motherhood Training Penalty  (with Xiao Ma, Alejandro Nakab, and Camila Navajas-Ahumada)

Women experience slower wage growth than men over their lifetimes, a gap often attributed to the "motherhood wage penalty," as childbearing reduces earnings. This paper links this penalty to differences in human capital using a pseudo-event study of first childbirth in Europe to document a "motherhood training penalty." Before parenthood, full-time male and female workers exhibit similar on-the-job training trends, but their trajectories diverge afterward. In the first 1-3 years of parenthood, women are 17%-22% less likely to train, compared to a 3%-8% decline for men. Additional evidence suggests this gap reflects employers' lower willingness to finance training for mothers.