About Me

• Labor as Capital: AI and the Ownership of Expertise
  with D. Li, S. Li · Working Paper

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  Many AI tools are trained on knowledge generated by workers. When surveyed, workers report having substantial control over how much knowledge they share with employers and are willing to restrict it when they learn that their expertise may be used to train models to perform similar work. Motivated by this evidence, we develop a formal model of "knowledge supply" to AI models and show that, given current institutions, workers may restrict knowledge supply to the detriment of overall productivity. Alternative policies can recover efficiency and raise both firm and worker welfare. Individual data ownership, despite being preferred by workers, eliminates knowledge withholding but creates negative externalities for workers: one worker's data strengthens the firm's bargaining position against others, potentially making all workers worse off. In contrast, collective data ownership achieves the first-best outcome, restoring knowledge supply while allowing workers to benefit from AI-driven productivity gains. These findings highlight the importance of labor agreements in shaping AI adoption in labor markets.

• Pushing the Envelope: The Effects of Negotiation
  with R. Perez-Truglia, B. Pakzad-Hurson · Revise & Resubmit, Econometrica

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  Salary negotiations are a widespread phenomenon that can shape key labor market outcomes, such as welfare and inequality. We provide novel empirical and theoretical insights into the causes and consequences of salary negotiations. We conducted two field experiments involving over 3,100 job seekers in the U.S. tech sector, designed to examine two types of information frictions. We find that a light-touch encouragement intervention significantly increased both negotiation attempts and compensation gains. In contrast, providing a substantial discount on negotiation coaching did not significantly affect negotiation attempts. Women responded more strongly to both interventions, helping to narrow gender gaps. We develop a new model of salary negotiations, incorporating risk and information frictions, that can better explain our experimental and non-experimental findings. The model's equilibrium analysis indicates that policies encouraging negotiation can enhance both welfare and equity.

• How Does Inequality Affect the Labor Movement?
  with B. Biasi, J. Gilman, N. Roussille · Reject & Resubmit, Quarterly Journal of Economics

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  This paper provides causal evidence on how wage inequality among workers affects the labor movement using three complementary research designs: a vignette experiment with union organizers, a natural policy experiment that increased wage inequality among Wisconsin school teachers, and an information intervention during the 2023 Writers Guild of America strike. Across all studies, we find that inequality undermines union strength through multiple channels. First, workers with high individual bargaining power are more likely to withdraw support in unequal environments, preferring individual over collective bargaining. Second, union organizers strategically respond to inequality in ways that may preserve membership but limit redistribution, such as shifting their campaign away from wages and choosing smaller, more homogeneous bargaining units. Taken together, our findings highlight the potential for "inequality traps," where rising inequality erodes the very institutions designed to counteract it.

• What's My Employee Worth? The Effects of Salary Benchmarking
  with S. Li and R. Perez-Truglia · Review of Economic Studies, Forthcoming

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  Firms are allowed to use aggregate data on market salaries to set pay, a practice known as salary benchmarking. Using national payroll data, we study firms that gain access to a tool that reveals market benchmarks for each job title. Using a difference-in-differences design, we find that the benchmark information reduces salary dispersion by 25%. Thus, salary dispersion must stem partly from aggregate uncertainty about the salaries offered by other firms. Our model formalizes how salary dispersion can arise even in competitive labor markets for identical workers when such uncertainty exists, and we discuss implications for an ongoing policy debate.

• Equilibrium Effects of Pay Transparency
  with B. Pakzad-Hurson · Econometrica, 2023 (Lead Article)

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  The discourse around pay transparency has focused on partial equilibrium effects: how workers rectify pay inequities through informed renegotiation. We investigate how employers respond in equilibrium. We study a model of bargaining under two-sided incomplete information. Our model predicts that transparency reduces the individual bargaining power of workers, leading to lower average wages. A key insight is that employers credibly refuse to pay high wages to any one worker to avoid costly renegotiations with others. When workers have low individual bargaining power, pay transparency has a muted effect. We test our model with an event-study analysis of U.S. state-level laws protecting the right of private-sector workers to communicate salary information with their coworkers. Consistent with our theoretical predictions, transparency laws empirically lead wages to decline by approximately 2%, and wage declines are smallest in magnitude when workers have low individual bargaining power.

• The Old Boys' Club: Schmoozing and the Gender Gap
  with R. Perez-Truglia · American Economic Review, 2023 (Lead Article)

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  Offices are social places. Employees and managers take coffee breaks together, go to lunch, hang out over drinks, and talk about family and hobbies. In this study, we show that employees' social interactions with their managers are advantageous for their careers and that this phenomenon contributes to the gender pay gap. We use administrative and survey data from a large financial institution. We estimate the impact of social interactions on career progression using quasi-random variation induced by the rotation of managers, along with the smoking status of managers and employees. When male employees who smoke transition to male managers who smoke, they take breaks with their managers more often and are subsequently promoted at higher rates. The smoker-to-smoker advantage is not accompanied by any differences in effort or performance. Moreover, we find that the male-to-male advantage is also only present among employees who work in close proximity to their managers, limiting the mechanism to channels requiring face-to-face interaction. The male-to-male advantage explains a third of the gender gap in promotions at this firm.

• Increasing Demand for Workers with a Criminal Background
  with W. Dobbie and M. Hoffman · Quarterly Journal of Economics, 2023

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  We experimentally test several approaches to increasing the demand for workers with a criminal record on a nationwide staffing platform by addressing potential downside risk and productivity concerns. The staffing platform asked hiring managers to make a series of hypothetical hiring decisions that impacted whether workers with a criminal record could accept their jobs in the future. We find that 39% of businesses in our sample are willing to work with individuals with a criminal record at baseline, which rises to over 50% when businesses are offered crime and safety insurance, a single performance review, or a limited background check covering just the past year. Wage subsidies can achieve similar increases but at a substantially higher cost. Based on our findings, the staffing platform relaxed the criminal background check requirement and offered crime and safety insurance to interested businesses.

• How Much Does Your Boss Make? The Effects of Salary Comparisons
  with R. Perez-Truglia · Journal of Political Economy, 2022

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  The vast majority of the pay inequality in an organization comes from differences in pay between employees and their bosses. But are employees aware of these pay disparities? Are employees demotivated by this inequality? To address these questions, we conducted a natural field experiment with a sample of 2,060 employees from a multibillion-dollar corporation in Southeast Asia. We make use of the firm's administrative records alongside survey data and information-provision experiments. First, we document large misperceptions among employees about the salaries of their managers and smaller but still significant misperceptions of the salaries of their peers. Second, we show that these perceptions have a significant causal effect on the employees' own behavior. When they find out that their managers earn more than they thought, employees work harder, on average. In contrast, employees do not work as hard when they find out that their peers earn more. We provide suggestive evidence of the underlying causal mechanisms, such as career concerns and social preferences. We conclude by discussing the implications of pay inequality and pay transparency.

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