Itay Saporta-Eksten
Job Market Candidate

Stanford University
Department of Economics
579 Serra Mall
Stanford, CA 94305
650-804-0501
isaporta@stanford.edu

Curriculum Vitae

Fields:
Labor Economics, Macroeconomics

Expected Graduation Date:
June, 2014

Thesis Committee:
Nicholas Bloom (Primary):
nbloom@stanford.edu

Luigi Pistaferri (Primary):
pista@stanford.edu

Monika Piazzesi:
piazzesi@stanford.edu

Working Papers

Job Loss, Consumption and Unemployment Insurance (Job Market Paper)
It is well known that job loss is associated with both pre- and post-job loss declines in hourly wages and earnings. Using recent data from the Panel Study of Income Dynamics, I show that consumption dynamics mirror these wage dynamics. To account for the consumption dynamics in the data I introduce a correlation between individual hourly wages and job loss into a life-cycle model with self insurance (through savings), social insurance, and endogenous unemployment durations. I find that this model is able to replicate the joint dynamics of wages, job loss and consumption that we observe in the data. I then show that accounting for the correlation between wages and job loss has important implications for the optimal design of unemployment insurance (UI). The consumption smoothing benefits of unemployment insurance are larger, and the cost of insurance lower, than suggested when this correlation is absent. Thus, while a model that assumes away these correlations yields optimal UI replacement rates close to zero, a model that incorporates the correlations predicts optimal rates of 0.54, slightly higher than the current US level.

Management in America with Nick Bloom, Erik Brynjolfsson, Lucia Foster, Ron Jarmin and John Van Reenen
The Census Bureau recently conducted a survey of management practices in over 30,000 plants across the US, the first large-scale survey of management in America. Analyzing these data reveals several striking results. First, more structured management practices are tightly linked to better performance: establishments adopting more structured practices for performance monitoring, target setting and incentives enjoy greater productivity and profitability, higher rates of innovation and faster employment growth. Second, there is a substantial dispersion of management practices across the establishments. We find that 18% of establishments have adopted at least 75% of these more structured management practices, while 27% of establishments adopted less than 50% of these. Third, more structured management practices are more likely to be found in establishments that export, who are larger (or are part of bigger firms), and have more educated employees. Establishments in the South and Midwest have more structured practices on average than those in the Northeast and West. Finally, we find adoption of structured management practices has increased between 2005 and 2010 for surviving establishments, particularly for those practices involving data collection and analysis.

Consumption Inequality and Family Labor Supply with Richard Blundell and Luigi Pistaferri. Revise and resubmit American Economic Review
In this paper we examine the link between wage inequality and consumption inequality using a life cycle model that incorporates household consumption and family labor supply decisions. We derive analytical expressions based on approximations for the dynamics of consumption, hours, and earnings of two earners in the presence of correlated wage shocks, non-separability and asset accumulation decisions. We show how the model can be estimated and identified using panel data for hours, earnings, assets and consumption. We focus on the importance of family labour supply as an insurance mechanism to wage shocks and find strong evidence of smoothing of male's and female's permanent shocks to wages. Once family labor supply, assets and taxes are properly accounted for there is little evidence of additional insurance.

Really Uncertain Business Cycles with Nick Bloom, Max Floetotto, Nir Jaimovich and Stephen J. Terry. Revise and resubmit Econometrica
We propose uncertainty shocks as a new shock that drives business cycles. First, we demonstrate that microeconomic uncertainty is robustly countercyclical, rising sharply during recessions, particularly during the Great Recession of 2007-2009. Second, we quantify the impact of time-varying uncertainty on the economy in a dynamic stochastic general equilibrium model with heterogeneous firms. We find that reasonably calibrated uncertainty shocks can explain drops and rebounds in GDP of around 3%. Moreover, we show that increased uncertainty alters the relative impact of government policies, making them initially less effective and then subsequently more effective.


Publications

The (Un)importance of Geographical Mobility in the Great Recession with Siddharth Kothari and Edison Yu. Review of Economic Dynamics (2013) [appendix] [data]

Unemployment during and after the Great Recession has been persistently high. One concern is that the housing bust reduced geographical mobility and prevented workers from moving for jobs. We characterize flows out of unemployment that are related to geographical mobility to construct an upper bound on the effect of mobility on unemployment between 2007 and 2012. The effect of geographical mobility is always small: Using pre-recession mobility rates, decreased mobility can account for only an 11 basis points increase in the unemployment rate over the period. Using dynamics of renter geographical mobility in this period to calculate homeowner counterfactual mobility, delivers similar results. Using the highest mobility rate observed in the data, reduced mobility accounts for only a 33 basis points increase in the unemployment rate.

Consumption and the Great Recession with Ivaylo Petev and Luigi Pistaferri. in The Great Recession , D. Grusky, B. Western and C. Wimer (eds.) [Updated with revised NIPA data, Aug. 2011].