Research

• Job Market Paper Declining Fertility and Housing Costs — Draft, Slides
  Abstract

  I study how the cost of family space shapes fertility decisions, and what role housing policy can play. Housing costs are at the center of the debate on declining fertility: children need space, and the young households who are deciding whether to have kids have few resources to pay for it. I build a life-cycle model in which households face income risk and choose fertility, savings, and whether to rent or own, subject to a down payment constraint. In the model, a child increases the demand for physical space, and young households face a tradeoff between having children sooner, when fecundity is high but earnings are low and uncertain, and later, after building up savings. I calibrate the model to the United States in 2007 and estimate an exogenous decrease in the desire for children to match the recent fertility decline. Along the transition to a new steady state with a smaller population, the presence of fewer households makes housing cheaper, which feeds back into higher fertility. I use the estimated model to assess different housing policies. Relaxing credit requirements has small effects on fertility in the medium run, as it mostly shifts the timing of fertility. Instead, the effect of policies that change long-term incentives, such as more housing supply and credit available only to parents, is stronger, and builds up over time. The results shed light on the importance of focusing on the long-run effects of policies aimed at increasing fertility.

• Consumption Sorting and Inequality (with Saverio Spinella) — Draft coming soon
  Abstract

  We study a spatial economy in which heterogeneous households and retailers jointly choose locations and trade in local markets, subject to housing congestion and shopping frictions. Retail competition can reinforce sorting and even sustain complete income segregation when heterogeneity in product tastes outweighs the shopping complementarities between poor and rich households. Two-sided sorting drives the mechanism: richer households locate in higher-amenity locations, and higher quality retailers cluster in those same locations, reinforcing the segregation pattern. Cross-household spillovers in prices paid have been the focus of the demand-driven market power literature; here we show that they are absent when sorting motives are strong enough.

  Using NielsenIQ data, we find evidence supporting the two-sided sorting mechanism: shopping intensity rises with retailer density and the price premium for high-end goods falls where the average retailer offers more high-end products. A calibrated version of the model allows us to study place-based policies aimed at reducing the cost of living. Budget-balanced subsidies that lower retailers’ costs are most effective in poorer locations. The burden of the implied redistribution on rich households can be mitigated by moderate price controls in the locations they cluster in.

Work in Progress

• Frictional Rental Markets and Inequality
  Abstract

  Using ACS microdata, I document new facts on the heterogeneity of paid rents across individuals and cities. First, young people tend to pay higher rents and move more frequently, especially in denser and less housing-elastic cities. Second, recent movers—both within and across cities—pay systematically higher rents. These effects are heterogeneous across space and stronger in larger, denser metropolitan areas.

  To rationalize these patterns, I develop a parsimonious model of directed search in the rental market. The model explains the observed dispersion in paid rents and implies that increases in housing supply would disproportionately benefit younger and more mobile households.