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Discussion Paper
Did Import Competition Boost Household Debt Demand?
In the years preceding the Great Recession, the United States experienced a dramatic rise in household debt and an unprecedented increase in import competition. In a recent staff report, we outline a link between these two seemingly unrelated phenomena. We argue that the displacement of workers exposed to import competition fueled their demand for mortgage credit, which left many households more vulnerable to the eventual downturn in the housing market.
Report
Import competition and household debt
We analyze the effect of import competition on household balance sheets from 2000 to 2007 using individual data on consumer finances. We exploit variation in exposure to foreign competition using industry-level shipping costs and initial differences in regions? industry specialization. We show that household debt increased significantly in regions where manufacturing industries are more exposed to import competition. A one standard deviation increase in exposure to import competition explains 30 percent of the cross-regional variation in household leverage growth, and is mostly driven by home ...
Working Paper
The Work-from-home Wage Premium
Using administrative data from France, we document that within the same detailed occupation, industry, and commuting zone, workers who work from home earn on average 12% higher hourly wages than fully on-site workers. Approximately half of this wage premium is accounted for by observable worker characteristics (such as education, gender, and age) and firm characteristics (such as size and productivity). The remaining 6% wage premium largely reflects selection: workers who work from home after the COVID-19 pandemic already earned higher wages before the pandemic.