This dissertation consists of four chapters. The unifying topic of these chapters is the study of recent macroeconomic trends in consumer bankruptcy, employment, firm dynamics, and aging in the U.S. economy. The first chapter shows that improved matching between borrowers and lenders quantitatively explains the rise in unsecured credit and consumer bankruptcies in the United States. The model is calibrated to match the increase in the population with access to unsecured credit. Results show that the increase in the matching efficiency accounts for more than 60 percent of the rise in unsecured credit and 80 percent of the rise in consumer bankruptcies. Furthermore, this explanation is consistent with the observed behavior of measures such as the charge-off rate, the (cross-sectional) average spread, and the increase in credit access by income quintiles. The second chapter quantifies the effect of investment-specific productivity and labor augmenting productivity in causing the decrease in low-skilled manufacturing employment concentrated in recessions. When the transition is computed with only investment-specific productivity, 18 percent of the decrease in low-skilled manufacturing employment is observed during recessions. When the transition is computed with both investment-specific productivity and labor-augmenting productivity, 52 percent of the decrease is observed during recessions. In the third chapter, written jointly with Joao Ayres, we show that the drop in firm entry has been an important feature of the Great Recession. In a standard model of firm dynamics featuring aggregate uncertainty and firm heterogeneity, we show that a negative aggregate productivity shock does not generate a drop in firm entry, while a negative demand shock does. We also provide empirical evidence that contradicts common explanations for the lack of firm entry, such as financial constraints, offshoring, increased uncertainty at the firm level, and increased self-employment. The fourth chapter shows that the aging population in the U.S. economy can jointly account for the following 3 facts since 2007: 1) Lack of recovery in employment to population for ages 25-64 or 25 plus; 2) Recovery in employment to labor force for ages 25-64 and 25 plus; and 3) Faster recovery of labor productivity compared to GDP.
University of Minnesota Ph.D. dissertation. 2017. Major: Economics. Advisors: Timothy Kehoe, Manuel Amador. 1 computer file (PDF); 115 pages.
Essays on Consumer Bankruptcy, Employment, Firm Dynamics, and Aging in the United States.
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