Latest drafts of my research papers:

Work in Progress:

Measurement Errors and Rank Correlations

with Martin Nybom and Toru Kitagawa

Kinship Correlations and Intergenerational Mobility

with Dolores Collado and Ignacio Ortuño-Ortín

The Dynamic Response of Municipal Fiscal Budgets to Revenue Shocks

with Ines Helm

Occupational Choice and Family Background: the Role of Borrowing Constraints

with Salvatore Lo Bello

Published and Working Papers:

Shift-Share Instruments and the Impact of Immigration

with Joakim Ruist and David A. Jaeger
NBER Working Paper 24285

A large literature exploits geographic variation in the concentration of immigrants to identify their impact on a variety of outcomes. To address the endogeneity of immigrants’ location choices, the most commonly-used instrument interacts national inflows by country of origin with immigrants’ past geographic distribution. We present evidence that estimates based on this “shift- share” instrument conflate the short- and long-run responses to immigration shocks. If the spatial distribution of immigrant inflows is stable over time, the instrument is likely to be correlated with ongoing responses to previous supply shocks. Estimates based on the conventional shift-share instrument are therefore unlikely to identify the short-run causal effect. We propose a “multiple instrumentation” procedure that isolates the spatial variation arising from changes in the country- of-origin composition at the national level and permits us to estimate separately the short- and long-run effects. Our results are a cautionary tale for a large body of empirical work, not just on immigration, that rely on shift-share instruments for causal inference.

The Impact of Immigration: Why Do Studies Reach Such Different Results?

with Christian Dustmann and Uta Schönberg
Published in the Journal of Economic Perspectives, Vol. 30(4), 2016

We classify the empirical literature on the wage impact of immigration into three groups, where studies in the first two estimate different relative effects, and the third the total effect of immigration on wages. We […]

Labor Supply Shocks, Native Wages, and the Adjustment of Local Employment

with Christian Dustmann and Uta Schönberg
Published in the Quarterly Journal of Economics, Vol. 132(1), 2017WP version

By exploiting a commuting policy that led to a sharp and unexpected inflow of Czech workers to areas along the German-Czech border, we examine the impact of an exogenous immigration-induced labor supply shock on local wages and employment of natives. On […]

Intergenerational Mobility:

Interpreting Trends in Intergenerational Mobility

with Martin Nybom
Current version. Previous version: SOFI Working Paper 3/2014.
Revise and Resubmit (2nd round) at the Journal of Political Economy
Discussed at the Brookings Institution.

We show that events in previous generations can explain contemporaneous shifts in intergenerational mobility. We first study the dynamic response of income mobility to structural changes in a model of intergenerational transmission. Mobility today depends on past policies and institutions, such that major reforms may generate long-lasting mobility trends over multiple generations. These trends are often non-monotonic, as mobility tends to be highest when a structural change occurs. Times of change are thus times of high mobility, while declining mobility today may reflect past gains rather than a recent deterioration of “equality of opportunity”. We then exploit data over three generations and a compulsory school reform in Sweden to test the dynamic implications of our model. The reform had a large, long-lasting, and non-monotonic effect: it reduced the transmission of disparities in income and education from parents to their offspring in the directly affected generation, but increased intergenerational persistence in the next.

The Transmission of Inequality Across Multiple Generations:
Testing Recent Theories with Evidence from Germany

with Sebastian Braun
Forthcoming at the Economic Journal. WP version

This paper shows that across multiple generations, the persistence of occupational and educational attainment in Germany is larger than estimates from two generations suggest. We consider two recent interpretations. First, we assess Gregory Clark’s hypotheses that the true rate of intergenerational persistence is higher than the observed rate, as high as 0.75, and time-invariant. Our evidence supports the first but not the other two hypotheses. Second, we test for independent effects of grandparents. We show that the coefficient on grandparent status is positive in a wide class of Markovian models, and present evidence against its causal interpretation.

Biases in Standard Measures of Intergenerational Income Dependence

with Martin Nybom
Published in the Journal of Human Resources, Vol. 52(3), 2017

Estimates of the most common mobility measure, the intergenerational elasticity, can be severely biased if snapshots are used to approximate lifetime income. However, little is known about biases in other popular dependence measures. We use long Swedish income series to provide such evidence for log-linear and rank correlations, and rank-based transition probabilities. Attenuation bias is considerably weaker in rank-based measures. Life-cycle bias is strongest in the elasticity; moderate in the log-linear correlation; and small in rank-based measures. However, with important exceptions: persistence in the tails of the distribution is considerably higher, and long-distance downward mobility considerably lower, than estimates from short-run income suggest.

Mobility Across Multiple Generations: The Iterated Regression Fallacy

download PDF, earlier working paper

Empirical evidence on the degree of long-run mobility across multiple generations is scarce. Predictions are instead routinely derived by exponentiation of intergenerational measures, implying high long-run mobility even when intergenerational mobility is low. Such extrapolations however presume that regression implies iterated regression, a statistical fallacy whose prevalence I briefly discuss. I then examine how elements of the transmission process affect the relation between intergenerational and multigenerational mobility. Considering direct and indirect transmission, the multiplicity of skills, and the role of grandparents I conclude that long-run mobility will likely be lower, possibly much lower, than predictions from intergenerational evidence suggest. I support these theoretical predictions with evidence from Swedish registries that cover three generations.

Previous version available as IZA Discussion Paper No. 7072

Heterogeneous Income Profiles and Life-Cycle Bias
in Intergenerational Mobility Estimation

download PDF, with Martin Nybom
Published in the Journal of Human Resources, Vol. 51(1), 2016

Using short snapshots of income in intergenerational mobility estimation causes “lifecycle bias” if the snapshots cannot mimic lifetime outcomes. We use uniquely long series of Swedish income data to show that this bias is large and to examine current strategies to reduce it. We confirm that lifecycle bias is smallest when incomes are measured around midlife, a central implication from a widely adopted generalization of the classical errors-in-variables model. However, the model cannot predict the ideal age of measurement or eliminate lifecycle bias at other ages. We illustrate how extensions of this model can reduce the bias further.

Previous version available as IZA Discussion Paper No. 5988