L. Rachel Ngai
Research Interest: Macroeconomics- Growth and Development, Structural Transformation, Labour Markets, Housing
Previous title "Structural Transformation, Marketization and Female Employment".
Abstract: We explain the narrowing of the post-war wage and employment gender gaps by the growth of the service economy. Our model has three sectors: goods, services and home production. Women have a comparative advantage in the production of services in the market and at home. The growth of the services sector (driven by predicted structural transformation and marketization) acts as an endogenous gender-biased demand shift and leads to a rise in women's wage and market hours relative to men's. Quantitatively, the model accounts for an important share of the observed rise in women's relative wage and market hours and the fall in men's market hours.
Abstract: Every year housing markets in the U.K. and the U.S. experience systematic above-trend increases in both prices and transactions during the second and third quarters (the "hot season") and below-trend during the fourth and first quarters (the "cold season"). House price seasonality poses a challenge to existing models of the housing market. To explain seasonal patterns, this paper proposes a matching model that emphasizes the role of match-specific quality between the buyer and the house and the presence of thick-market effects in housing markets. It shows that a small, deterministic driver of seasonality can be amplified and revealed as deterministic seasonality in transactions and prices, quantitatively mimicking the seasonal fluctuations observed in the
U.K.and the . U.S.
· Taxes, Social Subsidies and the Allocation of Work Time (with Chris Pissarides), American Economic Journal - Macroeconomics, October 2011, 3(4): 1-26.
Previous title: "Welfare Policy and the Sectoral Distribution of hours of Work".
We find large disparities in allocation of work time across 19 OECD countries especially for three sector groups: one that produces goods without home substitutes, and two others that have home substitutes but treated differently by welfare policy. We attribute the disparities to the countries' tax and subsidy policies. High taxation substantially reduces hours in sectors that have close home substitutes but less so in other sectors. Subsidies increase hours in the subsidized sectors that have home substitutes. We compute these policy effects for the 19 OECD countries.
What factors can jointly account for differences in research intensities and productivity growth across industries in a multi-sector endogenous growth model? They are the "technological opportunities": capital intensity of R&D, knowledge spillovers, and diminishing returns to R&D. US industry data implies that diminishing returns to R&D is the dominant factor quantitatively.
· Mapping Prices into Productivity in Multisector Growth Models (with Roberto Samaniego), Journal of Economic Growth, September 2009, Volume 14, p.183-204.
This paper argues that the composition of intermediate goods and the distinction between the productivity indices for value added and for gross output are important when mapping relative prices to relative productivity, and mapping multi-sector model and a reduced-form value-added model. When they are properly taken into account, the investment-specific technical change (ISTC) may well account for more than 90% of post-war US growth, compared to the previous finding of 60% when intermediate goods are ignored.
Two important transformations over the last century: reallocation of hours worked from agriculture to manufacturing then to services (structural transformation), and from home to market (marketization). This paper shows that they are caused by uneven productivity growth across "market and home production" (that produce good substitutes), and across "three types of consumption goods" (which are poor substitutes). The interaction of structural transformation and marketization generates a non-monotonic trend in the aggregate market hours of work along the aggregate balanced growth path.
One possible mechanism of the rise in the European unemployment during 1970s to the 1990s is the presence of public sector employment in
Europe: risk-averse workers can search for jobs in public or private sector and the public sector is more able to insure its employees against earning instability ("economic turbulence"). This paper shows that aggregate unemployment increases as a result of rising economic turbulence during the 70s to the 90s.
· Structural Change in a Multisector Model of Growth (with Chris Pissarides), American Economic Review, March 2007, Volume 97, No. 1, p. 429-443.
A longer working paper version: CEPR DP 4763. Previous title: "Balanced Growth with Structural Change".
Over the last century, most of the industrialized economies experience substantial labour reallocation across sectors (structural change/transformation, Kuznets' fact) while their aggregate variables appear to be on a balanced growth path (Kaldor's fact). This paper shows that structural change is explained by non-unitary elasticity of substitution across goods while unitary elasticity of substitution across time can preserve balanced aggregate growth in a multisector model with sector-specific productivity growth.
Cross-country income differences are large: the income ratio between top 5% and bottom 5% increases from less than 2 to over 30 for the last two centuries. The key observation is that the transition from stagnation to modern growth (a sustained growth in per capita income) is different across countries. This paper argues that barriers to technology adoption or capital accumulation affect both the beginning date and the subsequent pace of modern growth. The model matches the observed inverted U-shape of cross-country income differences, which implies that a substantial fraction of current income differences is transitional. Hence, the model requires smaller barriers to account for current income differences relative to models that focus only on steady states. Empirically, it finds that differences in the beginning dates of modern growth explain large differences in incomes.
Last update: April 2013