Research

Publications (in reverse chronological order)

Career Spillovers in Internal Labor Markets (with Giulia Bovini, Jin Li , Michael Powell, and Matteo Paradisi)
Review of Economic Studies, 90 (4), 1800-1831, 2023

Working paper, Published version

Abstract

This paper studies career spillovers across workers, which arise in firms with limited promotion opportunities. We exploit a 2011 Italian pension reform that unexpectedly tightened eligibility criteria for the public pension, leading to sudden, substantial, and heterogeneous retirement delays. We use administrative data on Italian private-sector workers and leverage cross-firm variation to isolate the effect of retirement delays among soon-to-retire workers on the wage growth and promotions of their colleagues. We find evidence of spillover patterns consistent with older workers blocking the careers of their younger colleagues. These effects are present only in firms with limited promotion opportunities.

Coverage: Kellogg Insight, Business Insider, The Weeds, New York Times, La Repubblica, The Visible Hand Podcast (audio).

The Effects of Fiscal Decentralization on Publicly Provided Services and Labor Markets (with Michela Giorcelli and Enrica Maria Martino)
Economic Journal, 133 (653), 1738-1772, 2023

Working paper, Published version, Slides

Abstract

This paper studies how fiscal decentralization affects labor supply. It explores a 1993 reform that increased the fiscal autonomy of Italian municipalities by replacing government transfers with revenues from a local property tax. Our identification leverages cross-municipal variation in the degree of decentralization that stems from differences in the average age of buildings caused by bombings during WWII. Decentralization expanded municipal services, such as nursery schools. These effects are larger in areas with greater political competition. The paper then investigates how the reform affected labor markets. Decentralization increased female labor supply—probably through expanded availability of nursery schools—thereby reducing the gender gap in employment.

Coverage: Gender Budget Report 2019 (MEF-RGS) presented at the Italian Parliament; Kellogg Insight.

Reconstruction Aid, Public Infrastructure, and Economic Development: The Case of the Marshall Plan in Italy (with Michela Giorcelli)
Journal of Economic History, 83 (2), 501-537, 2023

Working paper, Published version

Abstract

The Marshall Plan (1948–1952) was the largest aid transfer in history. This paper estimates its effects on Italy's postwar local economic development. It exploits plausibly exogenous differences between Italian provinces in the value of reconstruction grants they received. Provinces that could modernize a larger portion of their infrastructure stock experienced higher increases in agricultural production, especially for perishable crops that benefited the most from an efficient transportation system. In the same provinces, we observe larger investments in labor-saving machines, the entry of more firms into the industrial sector, and a larger expansion of the industrial and service workforce.

Coverage: UCLA Research, WeTheItalians.com.

The Effects of Computer-Assisted Learning on Students' Long-Term Development (with Yi Lu and Hong Song)
Journal of Development Economics, 158: 102919, 2022

Working paper, Published version

Abstract

In this paper, we examine the effect of computer-assisted learning on students’ long-term development. We explore the implementation of the “largest ed-tech intervention in the world to date,” which connected China’s best teachers to more than 100 million rural students through satellite internet. We find evidence that exposure to the program improved students’ academic achievement, labor performance, and computer usage. We observe these effects up to ten years after program implementation. These findings indicate that education technology can have long-lasting positive effects on a variety of outcomes and can be effective in reducing the rural–urban education gap.

Coverage: Diario Financiero, Mint, Kellogg Insight, Business Insider.

The Dynamics and Spillovers of Management Interventions: Evidence from the Training Within Industry Program (with Michela Giorcelli)
Journal of Political Economy, 130 (6): 1630-1675, 2022

Working paper, Published version

Abstract

This paper examines the long-term and spillover effects of management interventions on firm performance. Under the Training Within Industry (TWI) program, the U.S. government provided management training to firms involved in war production between 1940 and 1945. Using a newly collected panel dataset on all 11,575 U.S. firms that applied to the program, we find that the TWI training had positive and long-lasting effects on firm performance and the adoption of beneficial managerial practices. Moreover, it generated complementarities among different types of training and had positive spillover effects on the supply chain of trained firms.

Coverage: Kellogg Insight, Podcast, The Visible Hand Podcast (audio).

The Indirect Effects of Educational Expansions: Evidence from a Large Enrollment Increase in University Majors
Journal of Labor Economics, 38 (3): 767-804, 2020

Working paper, Published version

Abstract

Increasing access to education may have consequences that go beyond the effects on marginal students encouraged to enroll. It may change peer effects, school quality, and returns to skill. This paper studies how classmates and teaching inputs affect learning of university students, exploiting an educational expansion in Italian STEM majors. Newly-collected data on 27,236 students indicate that less-prepared classmates and congestion of teaching resources lowered learning of incumbent students in STEM fields. Their learning, however, increased in courses in which the new classmates raised average preparedness. These effects might have had long-lasting consequences on the returns to STEM degrees.

This is a newer version of my job market paper "The General Equilibrium Effects of Educational Expansion".
Coverage: Kellogg Insight, Marginal Revolution, IPR News, VoxEu, Washington Post, Science Careers.

Scientific Education and Innovation: From Technical Diplomas to University STEM Degrees. (with Michela Giorcelli)
Journal of the European Economic Association, 18 (5): 2608–2646, 2020

Working paper, Published version

Abstract

This paper uses a change in enrollment requirements in Italian STEM majors to study the effects of university STEM education on innovation and labor market outcomes. University-level scientific education had two direct effects on patenting of students who acquired a STEM degree thanks to the policy. First, it changed the direction of their innovation. Second, it moved these individuals closer to the innovation processes by allowing them to reach top positions within firms' hierarchies. STEM degrees, however, also changed occupational sorting. Some higher-achieving individuals used STEM degrees to enter jobs that required university-level education, but did not focus on patenting.

Coverage: Kellogg Insight, BYU Radio, 2025 Economic Report of the President (Chapter 7).

Compulsory Licensing and Innovation. Historical Evidence From German Patents After WWI. (with Petra Moser and Joerg Baten)
Journal of Development Economics, 126: 231-242, 2017

Working paper, Published version

Abstract

Compulsory licensing allows governments to license patented inventions without the consent of patent owners. Intended to mitigate the potential welfare losses from enforcing foreign-owned patents, many developing countries use this policy to improve access to drugs that are covered by foreign-owned patents. The effects of compulsory licensing on access to new drugs, however, are theoretically ambiguous: Compulsory licensing may encourage innovation by increasing competition or discourage innovation by reducing expected returns to R&D. Empirical evidence is rare, primarily because contemporary settings offer little exogenous variation in compulsory licensing. We address this empirical challenge by exploiting an event of compulsory licensing as a result of World War I when the US Trading with the Enemy Act made all German-owned patents available for licensing to US firms. Firm-level data on German patents indicate that compulsory licensing was associated with a 30 percent increase in invention by German firms whose inventions were licensed.

Coverage: Kellogg Insight, QSB Insight.

Working Papers

Countries for Old Men: An Analysis of the Age Pay Gap (with Matteo Paradisi)

Link

Abstract

This paper examines the widening pay gap between older and younger workers in high-income countries. Over the past four decades, the wages of older workers have grown significantly faster than those of younger workers, leading to a steep expansion in the age pay gap. Using detailed administrative data on 29 million workers across 3.5 million firms in Italy, along with data on 15.4 million workers from fourteen other countries, we analyze how workforce aging affects younger workers' career trajectories. Our findings are consistent with the existence of negative career spillovers: as older workers delay retirement and increasingly hold top jobs, many firms struggle to expand higher-ranked positions enough to preserve access for younger employees, pushing them into lower segments of the wage distribution. Consequently, younger workers increasingly enter the labor market at lower pay levels and experience slower wage growth after entry. They are also less likely to secure employment at higher-paying firms, which become progressively dominated by older workers. Cross-firm instrumental-variable regressions indicate that the deterioration in the career trajectories of younger workers is more pronounced in firms that have experienced more severe workforce aging. Finally, we argue that alternative explanations for these findings receive limited empirical support. These results underscore the challenges facing younger workers in aging economies and highlight the need for labor-market policies that balance the interests of both older and younger generations.

One Cohort at a Time: A New Perspective on the Declining Gender Pay Gap (with Jaime Arellano-Bover, Salvatore Lattanzio, and Matteo Paradisi)

Link

Abstract

This paper studies the interaction between the decrease in the gender pay gap and the stagnation in the careers of younger workers, analyzing data from the United States, Italy, Canada, and the United Kingdom. Our findings highlight the importance of labor-market entry to understand the shrinking of the gender pay gap. The entire decline in the aggregate pay gap originates from (i) newer worker cohorts who enter the labor market with smaller-than-average gender pay gaps and (ii) older worker cohorts who exit with higher-than-average gender pay gaps. Convergence at labor-market entry originates primarily from younger men's positional losses in firms' hierarchies and the overall pay distribution. We propose an explanation by which a larger supply of older workers can crowd out younger workers from a limited number of top-paying positions. These negative career spillovers disproportionately affect the career trajectories of younger men because they were more likely than younger women to hold higher-paying jobs at baseline. Consistent with this aging-driven crowd-out interpretation, younger men experience the largest positional losses within the hierarchies of firms that are more exposed to the aging of the workforce. These findings hold after controlling for alternative explanations for the progressive closure of the gender pay gap at labor-market entry. Finally, we document that labor-market exit has been the sole contributor to the decline in the gender pay gap after the mid-1990s, indicating that without structural breaks, the closure of the gender pay gap is unlikely in the foreseeable future.

Coverage: Kellogg Insight, Marginal Revolution, The Great Gender Divergence, Allnews, El Confidencial, Fortune, Bloomberg, Exame, CNBC, The Great Gender Divergence (2), Rocking Our Prior Podcast

Selected Work in Progress

Individual Contributors in Modern Organizations (with Jiarui Cao, Benjamin Friedrich, and Kieu-Trang Nguyen)

Coverage: Visier Insights Report

Other Publications

L'invecchiamento del mercato del lavoro e le carriere dei giovani (with Matteo Paradisi)
Rivista il Mulino, November 2024

The role of workforce ageing in closing the gender pay gap (with Jaime Arellano-Bover, Salvatore Lattanzio, and Matteo Paradisi)
VoxEU, July 2024

Workforce ageing can harm the careers of younger workers (with Matteo Paradisi)
VoxEU, June 2024

Fiscal decentralisation can improve women's labour outcomes (with Michela Giorcelli and Enrica Maria Martino)
VoxEU, February 2022

Reducing rural-urban education gap through computer-assisted learning: Evidence from China (with Yi Lu and Hong Song)
VoxEU, March 2021 (Also published by VoxChina and VoxDev)

What Happens to Younger Workers When Older Workers Don’t Retire? (with Jin Li and Michael Powell)
Harvard Business Review, November 2018

Access to Higher Education and the Value of a University Degree
VoxEU, December 2014