Thursday, September 12 at 4:00pm
Lewis Hall (RGL), 101
650 Childs Way, Los Angeles, CA 90089
Please join the USC Center for Sustainability Solutions for an Environmental Economics and Policy Seminar: Labor Market Adjustment to News with Jeffrey Shrader, Columbia University
Abstract: Labor market adjustment costs are central to understanding the welfare impacts of labor productivity shocks and the effects of a wide variety of economic policies. Using a global climate phenomenon which generates forecastable and differential rainfall conditions across commuting zones in the United States, this paper estimates the response of employment to future labor productivity at different anticipation horizons. Empirically, we find that news about future rainfall causes anticipatory reductions in construction employment, and the more time there is before the anticipated rainfall, the larger the response. These estimates imply that adjustment costs are large in this context. Heterogeneity analysis shows that both regulatory and non-regulatory factors are important drivers of costly adjustment. Finally, we calibrate a model to highlight one important question affected by adjustment costs: the welfare effects of changes in climate variability.
Bio: Jeffrey Shrader is an Assistant Professor of International and Public Affairs at Columbia University. His research areas include labor and environmental economics, and his work examines the role of expectations and forecasts in helping individuals prepare for changing environmental and economic conditions. He also studies how individuals use their time and how this choice impacts economic productivity. He holds a PhD in economics from the University of California, San Diego.