Research

The Macroeconomic Consequences of Family Policies (under review)

This paper studies the macroeconomic consequences of large-scale family policies in a heterogeneous-agent overlapping generations model with endogenous fertility and child investments, a multi-period demographic structure, and childcare choices. I find that cash rewards for childbirth raise fertility at the expense of human capital and intergenerational mobility in the long run. Meanwhile, average welfare rises as the old-age dependency ratio drops, leading to lower budget-balancing tax rates and higher consumption over the life cycle. In contrast, childcare and education subsidies are less cost-effective in boosting fertility, but they reduce income inequality and raise intergenerational mobility.

Teachers and the Evolution of Aggregate Inequality

Presentation slides

Teachers account for less than 5% of the workforce but have disproportionate impacts on the achievements of future generations. This paper studies how the reward structure of teachers affects the evolution of income inequality at the aggregate level. I show that, in a dynamic environment, there is a two-way relationship between teacher quality and population-wide human capital distribution. On the one hand, the occupation selection effect on teacher quality is proportional to the dispersion of human capital. On the other hand, deteriorating teacher quality elevates the dispersion itself when teachers and parental inputs are substitutes in children's human capital production. I use empirical evidence on duty-to-bargain laws to identify the model in closed form and quantify this mechanism. Counterfactual results suggest that raising the returns to human capital among teachers, e.g., through performance-based compensations, has large dynamic spillover effects such as reducing income inequality among non-teachers and boosting intergenerational mobility.