Research

Articles

Small firms and the pandemic: Evidence from Latin America [link]
(with Maria Elena Guerrero, John Eric Humphries, Christopher A. Neilson, and Gabriel Ulyssea)
Journal of Development Economics, March 2022
This paper studies the effects of the COVID-19 pandemic on small businesses between March and November 2020 using new survey data on 35,000 small businesses in eight Latin American countries. We document that the pandemic had large negative impacts on employment and beliefs regarding the future, which in turn predict meaningful economic outcomes in the medium-term. Despite the unprecedented amount of aid, policies had limited impact for small and informal firms. These firms were less aware of programs, applied less, and received less assistance. This may have lasting consequences, as businesses that received aid reported better outcomes and expectations about the future.

Working Papers

The Equity Weighted Social Cost of Carbon: Higher Estimates are Driven by Disproportionate Health Impacts on the Poor
(with R. Daniel Bressler, Lisa Rennels, David Smith, Bryan Parthum, Frank Errickson, and David Anthoff)
Resubmission invited at Nature
Climate change is expected to cause a significant increase in heat-related deaths. However, this will be counteracted by a decrease in cold-related deaths as well as reduced vulnerability to heat due to rising incomes—factors many studies do not consider. In this study, we project global temperature-related deaths at the country level, accounting for decreased cold-related mortality and increased adaptation to heat due to rising incomes. We estimate that climate change will cause 181 million premature deaths from 2023 to 2100 without accounting for future income growth and 85 million premature deaths when accounting for income growth. The hottest and poorest countries face a significant increase in premature deaths while some cold and rich countries see a slight reduction. We then use these projections to calculate an equity-weighted social cost of carbon (SCC). Equity weighting accounts for diminishing marginal utility by weighting a dollar of damage to the poor more than a dollar of damage to the rich. The large disparity in premature deaths between rich and poor countries considerably increases the SCC under equity weighting. In fact, we find that equity weighting is more important than discounting in driving results. Counting a dollar of damages in poor countries the same as a dollar of damages in rich countries yields a 2020 SCC of $218 per ton. Equity weighting increases the global SCC to $527 and the U.S. SCC to $3,224.

The Phantom Dismal Theorem: How Discounting and Mortality Valuation Interaction Can Cause Infinite Valuation of Future Lives [link]
(with R. Daniel Bressler and Kenneth Gillingham)
The use of a modular framework to calculate the social cost of greenhouse gases improves our understanding of uncertainty and enhances transparency. However, researchers must ensure that assumptions are compatible across modules. In this study, we show that following standard practice in Ramsey discounting and mortality valuation leads to deeply biased results. Indeed, under plausible assumptions about mortality damages from the recent literature, models will place infinite value on a single future life. This falsely suggests that climate change causes infinite damages, leaving it unanalyzable by benefit-cost analysis. We uncover straightforward solutions that ensure compatible monetization choices and lead to a stronger intellectual basis for the social cost of greenhouse gases.

Work in Progress

Labor Market Outcomes of the Clean Energy Transition
This paper proposes a dynamic discrete choice framework to analyze the reallocation of workers from the fossil fuel “dirty” sector to the renewable energy “clean” sector. In the baseline model I focus on workers’ decision-making processes and take the energy sector transition as an exogenous force. Workers’ transition from the dirty to the clean sector lags the energy sector transition but occurs much more rapidly once it begins. High-skill workers are first to transition due to higher earnings potential in the clean sector while low-skill workers wait until the likelihood of losing their jobs in the dirty sector is too high to ignore. I then propose next steps for including human capital accumulation and erosion as well as multidimensional skill. I estimate the baseline model using the U.S. Energy and Employment Report, a detailed survey of 30,000 energy sector employers. Finally, I characterize the relationship between worker transition and energy sector transition for a variety of policy scenarios, including one that meets the current US goal of 100% clean power by 2035.

Non-Peer Reviewed Publications

An Analysis of Job Creation and Community Benefits from Green Investments [link] [webinar]
(with Jonah Kurman-Faber and Ruby Wincelle)
Climate XChange Report, May 2021
This report analyzes the potential job creation and quality of life benefits from investing in clean transportation, sustainable development, clean energy, energy efficiency, and natural resource conservation in Massachusetts. These investments are found to create significantly more jobs per dollar than the state’s overall economy, as well as the state’s ten largest industries. Additionally, the investments return over two dollars in cost savings, time savings, and health benefits for every dollar invested. These findings can be re-weighted to project the potential jobs and community benefits from future spending packages in the Commonwealth.