We develop a theory and an empirical strategy to estimate the welfare gains of economic integration in economies with frictional local labor markets. The model yields a welfare formula that nests previous results in the literature and features an additional adjustment margin, via the employment...

We consider the role of differences in outside wages-the wages earned by similar workers in other jobs-in shaping pay differentials, focusing on the gender dimension in the U.S. during 1980-2010. Using instruments that exploit differential exposure to common industry wage shocks, we find a...

We argue that skill-biased technological change not only affects wage gaps between skill groups, but also increases wage inequality within skill groups, across workers in different workplaces. Building on a heterogeneous firm framework with labor market frictions, we show that an industry-wide...

Wage inequality has risen in many countries over recent decades. At the same time, production has become increasingly concentrated in a small number of firms. In this paper, we show that these two phenomena are linked. Theoretically, we show that shocks that increase concentration will also lead...

Wage inequality has risen in many countries over recent decades. At the same time, production has become increasingly concentrated in "superstar" firms. In this paper, we show that these two phenomena are linked. Theoretically, we show that shocks that increase concentration, such as an increase...

In this paper we provide a new identification strategy to test for the presence of putty-clay capital, i.e. capital that once installed cannot be re-invested. Using a panel of Indian manufacturing firms between 1995 and 2006, we quantify the response of firm sales within and across industries to...

This paper explores how school-age exposure to storms impacts the education and primary activity status of young adults in India. Using a cross-sectional cohort study based on wind exposure histories, we find evidence of a significant deskilling of areas vulnerable to climate change-related...