University of Utah
Department of Finance
Spencer Fox Eccles Business Bldg. Room 1113
1655 East Campus Center Drive
Salt Lake City, Utah 84112
NBER Working Papers and Publications
|October 2018||Analyzing the Aftermath of a Compensation Reduction|
with Jason Sandvik, Richard Saouma, Christopher Stanton: w25135
Firms rarely cut compensation, so little is known about the after-effects when compensation reductions do occur. We use commission reductions at a sales firm to estimate how work effort and turnover change. In response to an 18% decline in sales commissions, corresponding to a 7% decline in median take-home pay, we find turnover increases for the most productive workers. We detect limited effort responses. Turnover and effort responses do not differ based on workers' survey replies regarding expectations of firm fairness or future promotion. The findings indicate that adverse selection concerns on the extensive margin of retaining workers drive the empirical regularity that firms rarely reduce compensation.
|November 2016||The Optimal Distribution of Population across Cities|
with David Albouy, Kristian Behrens, Frédéric Robert-Nicoud: w22823
The received economic wisdom is that cities are too big and that public policy should limit their sizes. This wisdom assumes, unrealistically, that city sites are homogeneous, migration is unfettered, land is given freely to incoming migrants, and federal taxes are neutral. Should those assumptions not hold, large cities may be inefficiently small. We prove this claim in a system of cities with heterogeneous sites and either free mobility or local governments, where agglomeration economies, congestion, federal taxation, and land ownership create wedges. A quantitative version of our model suggests that cities may well be too numerous and underpopulated for a wide range of plausible parameter values. The welfare costs of free migration equilibria appear small, whereas they seem substantial...
Published: David Albouy & Kristian Behrens & Frédéric Robert-Nicoud & Nathan Seegert, 2018. "The optimal distribution of population across cities," Journal of Urban Economics, .