Publications
Foreign Aid, Human Capital Acquisition and Educated Unemployment: Fish or Fishing, with Xiangbo Liu, Chi-Chur Chao, and Eden S.H. Yud. International Review of Economics and Finance 64 (2019): 1-8. [URL]
Abstract: By tying aid to the productive purpose of the skilled sector, this paper explores the effects of foreign aid on human capital acquisition and educated unemployment in the recipient economy. Utilizing a search and matching model, a rise in the allocation of aid used for the productive purpose can provide incentives to firms for more job entries and result in a lower unemployment rate among skilled workers. However, this result can be mitigated or even overturned when endogenous human capital acquisition is incorporated. We also show that an increase in the portion of foreign aid used for education subsidy can increase the supply but reduce the demand for skilled labor. This thus results in a higher educated unemployment rate in the economy.
Delayed Retirement Policy and Unemployment Rates, with Tiantian Dai, Xiangbo Liu, and Chao Ma. Journal of Macroeconomics 71 (2022): 103387. [URL]
Abstract: This paper examines the impact of retirement policy on the unemployment rates for both young and old workers. It employs a labor search framework with a constant elasticity of substitution production function and cross-market matching to investigate the channels through which the delayed retirement policy has impacts. The findings show that through the cross-market matching channel, retirement policy increases the unemployment of young workers (it is ambiguous for old workers) and has a negative effect on the wages of cross-market matched workers. The latter effect is negative for young workers (positive for old workers) through the capital-skill complementarity. The paper calibrates the model to the U.S. data and quantifies the effects of retirement policy during the first decade of this century. Counterfactual experiments highlight the contribution of each channel.
Working in Progress
Ambiguity Aversion, Human Capital, and Wealth Inequality, with Yulei Luo and Jun Nie.
Foreign Aid, Human Capital Acquisition and Educated Unemployment: Fish or Fishing, with Xiangbo Liu, Chi-Chur Chao, and Eden S.H. Yud. International Review of Economics and Finance 64 (2019): 1-8. [URL]
Abstract: By tying aid to the productive purpose of the skilled sector, this paper explores the effects of foreign aid on human capital acquisition and educated unemployment in the recipient economy. Utilizing a search and matching model, a rise in the allocation of aid used for the productive purpose can provide incentives to firms for more job entries and result in a lower unemployment rate among skilled workers. However, this result can be mitigated or even overturned when endogenous human capital acquisition is incorporated. We also show that an increase in the portion of foreign aid used for education subsidy can increase the supply but reduce the demand for skilled labor. This thus results in a higher educated unemployment rate in the economy.
Delayed Retirement Policy and Unemployment Rates, with Tiantian Dai, Xiangbo Liu, and Chao Ma. Journal of Macroeconomics 71 (2022): 103387. [URL]
Abstract: This paper examines the impact of retirement policy on the unemployment rates for both young and old workers. It employs a labor search framework with a constant elasticity of substitution production function and cross-market matching to investigate the channels through which the delayed retirement policy has impacts. The findings show that through the cross-market matching channel, retirement policy increases the unemployment of young workers (it is ambiguous for old workers) and has a negative effect on the wages of cross-market matched workers. The latter effect is negative for young workers (positive for old workers) through the capital-skill complementarity. The paper calibrates the model to the U.S. data and quantifies the effects of retirement policy during the first decade of this century. Counterfactual experiments highlight the contribution of each channel.
Working in Progress
Ambiguity Aversion, Human Capital, and Wealth Inequality, with Yulei Luo and Jun Nie.