Knowledge that Transforms

We present a dynamic quantitative trade and migration model that incorporates downward nominal wage rigidities and show how this framework can generate changes in unemployment and labor participation that match those uncovered by the empirical literature studying the China shock. We find that the China shock leads to average welfare increases in most US states, including many that experience unemployment during the transition. However, nominal rigidities reduce the overall US gains by around two-thirds. In addition, there are 18 states that experience welfare losses in the presence of downward nominal wage rigidity that would have experienced gains without it.

We test Le Play's (1875) hypothesis that the French Revolution contributed to France's early fertility decline by imposing equal partition of inheritance among all children, including women. We combine new data on local inheritance rules before the Revolution and individual-level demographic data from historical sources and crowdsourced genealogies. Difference-in-differences and regression-discontinuity estimates show that the inheritance reforms enacted during the Revolution reduced completed fertility by 0.5 children. A key mechanism was the desire to avoid land fragmentation across generations. These reforms closed the fertility gap between regions with different historical inheritance rules and crucially contributed to France's demographic transition.

This paper provides an equilibrium framework to evaluate environmental policy in trade-exposed industries with imperfectly competitive supply chains. The empirical setting is the South American agricultural sector, a global agricultural powerhouse with a major environmental impact. On the supply side, I address key margins determining emissions: how much land farmers choose to deforest, which commodity they choose to produce, and the geographic location where deforestation and production take place. On the demand side, I allow for market power along the supply chain: farmers’ access to consumers is intermediated by a monopsonistic agribusiness sector. Given the infeasibility of a first-best carbon tax, I use my framework to evaluate feasible alternatives, such as environmental tariffs on imports from South America. Unless all trading partners regulate their imports, emissions reductions achieved by regulated markets are mostly offset by increased trade flows to non-regulated markets. Apart from being ineffective, unilateral tariffs have regressive distributional effects across space, as farmers in the poorest regions, where supply is most inelastic, disproportionately bear the burden of regulation through lower farm-gate prices. Finally, agribusiness market power exacerbates the ineffectiveness and regressivity of the policy. Thus, policies aimed at correcting a single externality can interact with other market distortions—affecting their performance not only in efficiency terms, but also in how they skew the distribution of the remaining surplus.

This paper investigates the weekly evolution of skills as measured by unique data from a widely-emulated early childhood home-visiting program in rural China. The design of the study avoids input endogeneity issues and lack of comparable measures of skills that plague previous studies. Skills, nominally classified as the same, in fact, do not appear to share a common unit scale across levels. They are produced by skill-lifecycle-stage-specific learning processes. A novel dynamic stochastic skill production model for multiple skills is developed, aligning with empirical evidence. The model explains the "fadeout" of measures of learning through forgetting or depreciation of skills.