Aruni Mitra

PhD Job Market Candidate

My research interests are in Macroeconomics and Labour Economics. My job market paper explores how increased labour market flexibility, partly due to rapid de-unionization in the mid-1980s, led productivity to become more countercyclical in the U.S. In a different paper, I examine the impact of intra-family linkages on the evolution of consumption and income inequality across generations.

I will be available for interviews at the 2019 CEEE meeting in Toronto, the 2019 EEA meeting in Rotterdam, and the 2020 ASSA/AEA meeting in San Diego. I expect to graduate in 2020.

JOB MARKET PAPER

For nearly four decades in the post-War United States, average labour productivity and total factor productivity remained procyclical — falling during recessions and rising in booms. Productivity puzzle refers to the sudden vanishing of this procyclicality of productivity during the mid-1980s. This paper argues that increased labour market flexibility, as manifest in rapid de-unionization, can help explain the puzzle. Declining costs of hiring and firing workers due to the fall in union power prompted firms to rely more on employment adjustment instead of intensive margin changes in workers’ effort through labour hoarding. Since labour hoarding explained procyclicality of productivity historically, lower dependence on it in recent decades made measured productivity less procyclical. Cross-sectional evidence from U.S. states and industries, as well as the changing responses of the aggregate U.S. economy to technology and demand shocks, bear out this mechanism. Allowing the hiring cost to change between pre and post-1980s in an otherwise standard New Keynesian model with endogenous effort is shown to match the empirical patterns in productivity moments quite well.[GO TO PAPER]

WORKING PAPER

We characterize the joint evolution of cross-sectional inequality in permanent income and consumption among parents and children in the U.S. We use a model of intra-family persistence across generations to estimate the parameters determining inequality of consumption and income within a generation. In accounting for cross-sectional dispersion, we find that idiosyncratic heterogeneity is quantitatively more important than inequality arising from family factors. This suggests that parents provide limited insurance against idiosyncratic life-cycle risk, even though the levels of permanent income and consumption exhibit persistence across generations.[GO TO PAPER]

WORK IN PROGRESS

Around the mid-1980s, the U.S. economy experienced the Great Moderation – a sharp decline in the cyclical volatility of key macroeconomic variables. While total hours worked also experienced this fall in volatility for conventional business cycle frequencies (between 6 and 32 quarters), I show that the volatility of hours increased sharply for low frequencies (between 32 and 60 quarters) from the mid-1960s till the mid-1990s. This paper argues that rising female labour force participation can account for much of this missing Great Moderation for hours. Increase in the proportion of households with secondary earners increases family labour supply elasticity that in turn leads to the rising volatility of hours.

PUBLICATION

This article attempts to fill a gap in the existing literature by providing a holistic working definition of inclusive growth. We measure inclusive growth through a newly proposed index, named as the Inclusive Growth Index (IGI), based on 24 developmental indicator variables (categorized into expansion, sustainability, equity in access, and efficiency of economic activities and institutions) as its components. We have employed two kinds of weighting schemes in constructing the index: an ad hoc weighting scheme and a weighting scheme based on principal component analysis (PCA), performed differently on variables under each dimensions. This index helps one to rank countries or regions according to their respective inclusive growth achievements and to potentially track the time trend of a particular country. In our study, we have calculated IGI for 16 Asian countries and compared the IGI scores across the nations.[GO TO PAPER]

Teaching Assistant (undergraduate courses)

• ECON 101 Principles of Microeconomics (2015)
• ECON 302 Intermediate Macroeconomics (2016, 2018)
• ECON 325 Introduction to Empirical Economics (2018)
• ECON 326 Methods of Empirical Research in Economics (2017, 2019)
• ECON 328 Methods of Empirical Research (2019)
• ECON 356 Introduction to International Finance (2017, 2018)
• ECON 456 International Macroeconomics and Finance (2016)

Course Material Preparation
Prepared applied Econometrics material for website called “Data with STATA”, to be used in undergraduate Economics research course, 2018.

Graduate Teaching Assistant Trainer
Held training session for incoming cohort of graduate teaching assistants, 2018.