Working Papers
- ▷ Abstract NBER Working Paper No. 32375
Are labor markets in higher-income countries more meritocratic, in the sense that worker-job matching is based on skills rather than idiosyncratic attributes unrelated to productivity? If so, why? And what are the aggregate consequences? Using internationally comparable data on worker skills and job skill requirements of over 120,000 individuals across 28 countries, we document that workers' skills better match their jobs' skill requirements in higher-income countries. To quantify the role of worker-job matching in development accounting, we build an equilibrium matching model that allows for cross-country differences in three fundamentals: (i) the endowments of multidimensional worker skills and job skill requirements, which determine match feasibility; (ii) technology, which determines the returns to matching; and (iii) idiosyncratic matching frictions, which capture the role of nonproductive worker and job traits in the matching process. The estimated model delivers two key insights. First, improvements in worker-job matching due to reduced matching frictions account for only a small share of cross-country income differences. Second, however, improved worker-job matching is crucial for unlocking the gains from economic development generated by adopting frontier endowments and technology.
Work in Progress
Family Matters: How Globalization Reshapes Firm Management and Productivity
- ▷ Abstract Funding: IGC, PEDL
How does globalization affect firm management and productivity? I investigate this question using a product-specific import competition shock in India, focusing on family-managed firms: the predominant form of corporate governance in many developing countries. Utilizing a novel manager-firm matched administrative dataset, I analyze tenure records and family ties of over 6 million company directors. Employing an event-study approach, I find that firms exposed to increased import competition are more likely to replace family managers with professional executives, resulting in productivity improvements. To evaluate the aggregate implications, I construct a model of industrial equilibrium where family firms balance non-pecuniary private benefits of family management against potential higher profits achievable through professional management. Consistent with empirical findings, the model predicts that import competition drives the least productive family firms to adopt professional management to avoid exit. These results underscore managerial restructuring as a critical mechanism linking competition to productivity gains.
Import Competition and the Long Run Effects of Industrial Policy: Evidence from India
- Funding: IGC
- with Daron Acemoglu and Utkarsh Saxena
Artificial Intelligence and Judicial State Capacity in India
- with Utkarsh Saxena
- Funding: IGC, Open Philanthropy
How Much do Firms Save? Financial Frictions and the Microeconomic Implications of the Euler Equation
- Funding: STEG
- Utkarsh Saxena and Henry Zhang
- Funding: PEDL, STICERD, George and Obie Shultz Fund
Labor Market Frictions, the Organization of Labor, and Structural Change
- with Chinmay Lohani and Utkarsh Saxena
- Funding: STEG
Digitizing Historical Indian Plant-Level Data on Labour Outcomes
- with Utkarsh Saxena
- Funding: PEDL, G²LM|LIC