Research
Working Papers
Job Ladder over Production Networks with Emmanuel Dhyne (Job Market Paper)
Best Paper Award at the 22nd GEP/CEPR Annual Postgraduate Conference
Abstract: This paper examines how workers' career paths 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 compared to 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, and accounting for this network search channel reduces the diversification of workers' outside options, increasing their vulnerability to productivity shocks to production networks.
Foreign Demand Shocks to Production Networks: Firm Responses and Worker Impacts with Emmanuel Dhyne, Ayumu Ken Kikkawa, Magne Mogstad, and Felix Tintelnot, July 2022
Revision requested at American Economic Review
Abstract: We quantify and explain the firm responses and worker impacts of foreign demand shocks to domestic production networks. To capture that firms can be indirectly exposed to such shocks by buying from or selling to domestic firms that import or export, we use Belgian data with information on both domestic firm-to-firm sales and foreign trade transactions. Our estimates of firm responses suggest that Belgian firms pass on a large share of a foreign demand shock to their domestic suppliers, face upward-sloping labor supply curves, and have sizable fixed overhead costs in labor. Motivated and guided by these findings, we develop and estimate an equilibrium model that allows us to study how idiosyncratic and aggregate changes in foreign demand propagate through a small open economy and affect firms and workers. Our results suggest that the way the labor market is typically modeled in existing research on foreign demand shocks—with no fixed costs and perfectly elastic labor supply—would grossly understate the decline in real wages due to an increase in foreign tariffs.
Other Article
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.
Work in Progress
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