Research

Markups, Labor Share, and Wage Dispersion Job Market Paper

Market powers can affect firm behaviors in labor market. This paper argues that the decrease in the overall wage since 2000 is caused by both rising product markup and falling labor markdown. The significant decrease in wages among lower percentiles has led to an increase in wage dispersion and a decrease in the aggregate labor share. I build a heterogeneous firm model to demonstrate that the decline in wages, especially among the lower percentiles, can be attributed mainly to the monopsony power of firms, which explains the rise in wage inequality and the fall in labor share.

How Does Land Use Policy Affect Local Labor Market and Housing Market? with Jiakai Zhang (Paper)

This paper examines the impact of land use policy on the local labor market and housing market in China. There are two primary land use purposes: residential land and commercial land. We found that the more commercial land that the Chinese local government grants, the lower the regional unemployment rates, the higher the regional wages, and the higher the housing prices. We then built a model to investigate the mechanism behind the aforementioned empirical facts. Higher commercial land use attracts more firms and creates more jobs but reduces the land available for building houses. The combination of rising housing demand and reducing housing supply brings up the housing prices in high commercial land use areas.

Shifting Employment and Investment Structures Towards Environmental Sustainability with Juin-Jen Chang, Jhy-Yuan Shieh, Jhy-Hwa Chen, and Jiakai Zhang (paper)

This paper examines the labor market implications of China’s Environmental Protection Tax (EPT) reform, focusing on the employment shifts between heavy- polluting and non-heavy-polluting industries. Using data from the China Stock Market and Accounting Research (CSMAR) database, we find that the implementation of EPTs has significantly reduced employment in heavy-polluting industries while causing a modest increase in employment in non-heavy-polluting industries. The reform has also spurred investment in green technologies, especially in non- heavy-polluting sectors. By developing a structural model, we quantify the em- ployment reallocation and green investment dynamics before and after the EPT implementation in 2016. Our findings provide important insights into the eco- nomic impacts of environmental regulation on industry employment and investment patterns, offering valuable policy implications for economies pursuing sustainable growth and environmental governance.