Market power and welfare  effects of immigration Skill-biased remote work and incentives. With  Fabio Cerina and Simone Nobili. PDF  
Abstract.    ​We document four key trends since the pandemic: a surge in remote work, an increase in performance pay, their joint occurrence, and the skill-biased nature of this complementarity. We develop a firm-worker model that explains this evidence. We show that, under risk aversion, the incentive-compatible performance pay premium falls with worker’s skills, as the likelihood of a good performance increases. Hence, the firm uses performance pay if the worker is sufficiently skilled and fixed pay with monitoring, otherwise. The unforeseen pandemic shock forces the firm to adopt remote work and reduces monitoring effectiveness. As a result, the firm relies more on performance pay. Post-pandemic, the firm always sticks to the remote work if the worker is sufficiently skilled. If the worker is too unskilled for performance pay to be cost-effective, the firm sticks to remote work only if remote monitoring is effective. Accordingly, the model predicts that a decline in remote monitoring efficacy could reduce remote work for less-skilled workers only. To test this, we exploit temporal variation in legislation in New York State, using a Difference-in-Differences approach, to estimate the impact of stricter regulations of remote monitoring on the adoption of remote work. Such a test strongly supports our model’s predictions. Our findings suggest that pandemic policies and regulations may have played a significant role in shaping the adoption and persistence of remote work and performance pay.


Market power and welfare  effects of immigration . With Gianfranco Atzeni, Marco Delogu, and Dimitri Paolini. PDF 
Abstract.    We analyze the effects of migration allowing for endogenous labor supply in a standard two-region model with monopolistically competitive producers and love for variety. We find that the welfare effects of migration depend on firms’ market power in the final good markets. If market power is sufficiently high, migration of low-skill individuals positively affects the welfare of native high skill individuals in the destination region, while low skill individuals are unaffected. Natives of the origin region are always better off, irrespective of their skills. Differently, if market power is sufficiently low, low skill migration makes both high and low individuals native of the destination region better off.

Why are some firms discouraged from borrowing?     With Pasqualina Arca and Gianfranco Atzeni --In progress, 1st draft soon

Financial frictions and business formation in the US economy. With Miguel Casares and  Jose Enrique Galdon  -- In progress