Job Ladder and Dynamic Monopsony in Production Networks with Emmanuel Dhyne (Job Market Paper, new draft coming soon)
Best Paper Award at the 22nd GEP/CEPR Annual Postgraduate Conference and 17th FIW-Research Conference International Economics
Abstract: This paper examines how workers' outside options are concentrated within the supply chains of their employers. Using Belgian data on firm-to-firm sales relationships merged with a matched employer-employee dataset, we find that workers are connected through the sparse networks of employers and frequently move to buyers or suppliers of their current employers. Movers within these production networks climb up job ladders at a faster pace but with smaller immediate earnings gains than other movers. Motivated by these findings, we develop and estimate an equilibrium model of firm-to-firm trade and on-the-job search. We estimate a higher job-finding rate along production networks, which enables well-connected firms to suppress wages. Accounting for the network search channel increases workers' exposure to correlated shocks in production networks.
Firm Responses and Wage Effects of Foreign Demand Shocks with Fixed Labor Costs and Monopsony with Emmanuel Dhyne, Ayumu Ken Kikkawa, Magne Mogstad, and Felix Tintelnot, 2024
Revision requested at American Economic Review
Abstract: We quantify the firm responses and real wage effects of foreign demand shocks. We use Belgian micro data to construct firm-specific measures of demand shocks which capture that firms pass on foreign demand shocks to domestic suppliers. Our estimates of firm responses to these shocks suggest that firms face upward-sloping labor supply curves and have sizable fixed labor costs. We specify a general equilibrium model with these features to quantify the aggregate effects of simulated tariff shocks on wages. We find that ignoring fixed labor costs substantially underestimates aggregate effects on wages, whereas incorporating upward-sloping labor supply appears less consequential.
The Belgian Business-to-Business Transactions Dataset 2002-2021 with Emmanuel Dhyne and Cédric Duprez, NBB Working Paper No 444, 2023
Abstract: This paper provides an updated overview of the network of Belgian business-to-business transactions from 2002 to 2021, building on the previous vintage of the dataset which covered 2002-2014. Leveraging data from VAT client lists, we establish a comprehensive and cohesive database detailing the values of transactions between non-financial corporations in Belgium. This database encompasses all sectors, ranging from primary industries, manufacturing and utilities to construction, business services and other services. With its unmatched breadth at the level of individual firms and panel dimensionality, the dataset facilitates diverse research inquiries in areas such as industrial organisation, international trade, and network theory. To give readers a clearer picture, this paper also highlights several key insights about the Belgian network. Due to the confidential nature of the data, access to this dataset is restricted to NBB staff members.
Dual Labor Market and Domestic Outsourcing: Evidence from Belgium with Emmanuel Dhyne
Firm Life Cycle, Endogenous Production Networks, and Frictional Labor Market with Emmanuel Dhyne and Xianglong Kong
Age Sorting in the Labor Market with Hyejin Park