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Theses

Three essays in applied macro

Abstract : During my PhD I conducted applied macroeconomic research on several different topics, spanning from the effects of job polarization on workers reallocation to the effects of monetary policy on firms capital structure and financial decisions. This thesis collects three articles on these arguments. The main article of the thesis is my job market paper. This work gave me the opportunity to explore in detail the effects of technological change on the occupational structure of labor markets, but also its effects on the reallocation of workers across jobs and the process of sorting skills to jobs. Or in other words, the paper answers these questions: how do workers use the job ladder when technological innovation changes its structure? What are their job opportunities, given their skills, when technology changes? And what skills do employers look for? This argument always intrigued me, and its relevance is raising the attention of governments and policy makers in many developed economics. My research departs from these facts to analyze what are the heterogeneous effects of technological change on workers and firms. In particular, it shows -as already documented in the literature on job polarization- that technological innovation reshapes the occupational structure of the economy by destroying some type of jobs. However I show that, at the same time, technological innovation changes the demand for skills in each occupation such that it has heterogeneous effects across workers in terms of labor mobility, job opportunities and match quality. In particular, this paper is the first to show that technology - by causing the polarization of the labor market- triggers large movements from the top to the bottom of the job ladder, with many workers ending up in lower paying and lower qualifying occupations just after the disruptive effects of technological change were consumed. The effects of technological change on labor market outcomes and dynamics is explored also in the second chapter of this thesis. In particular, this work, joint with Joanne Tan, shows how technological change can explain the raise of occupational shortage. More interestingly, it shows how different segments of the labor market react to occupational shortage. In the last chapter of the thesis, I turn my attention to the relationship of monetary policy and corporate decision of share repurchase. This topic is fully unrelated from the previous one, but I have always been interested on how macro-variables can influence managers decisions at micro level. In this work, joint with Assia Egouace, we use firm-level data and show that American corporations buyback more their own shares in period of accommodating monetary policy, i.e. when the cost of debt is low. In fact we show that if the yield curve of a firm adjusts in the direction predicted by monetary policy, i.e. the corporate cost of debt diminishes, the firm is going to issue more bonds to raise money at lower costs. However, they are going to use most of these new liquidity to finance a repurchase program rather than investing into new capital and employment. This crowding out effect of buybacks on new investment and employment casts doubts since it attenuates the transmission of monetary policy.
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https://hal-sciencespo.archives-ouvertes.fr/tel-03655600
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Submitted on : Friday, April 29, 2022 - 4:56:57 PM
Last modification on : Saturday, April 30, 2022 - 3:36:04 AM

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  • HAL Id : tel-03655600, version 1

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Riccardo Zago. Three essays in applied macro. Economics and Finance. Institut d'études politiques de Paris - Sciences Po, 2018. English. ⟨NNT : 2018IEPP0027⟩. ⟨tel-03655600⟩

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