Essays on structural change and macroeconomic outcomes

Thesis

This thesis, Essays on Structural Change and Macroeconomic Outcomes, studies how demographic, organizational, and technological change shape macroeconomic outcomes. It combines structural models with micro data to uncover the mechanisms linking individual behavior to aggregate dynamics.

The first chapter analyzes how population aging interacts with ambiguity aversion and impacts on portfolio choice. With rising life expectancy, wealthier and older individuals become endogenously less pessimistic about risky assets, while younger households become more pessimistic, leading to increasing intergenerational inequality. Survey data support this mechanism, and model projections imply a 26% increase in the age gradient of risky asset holdings by 2100.

The second chapter studies the macroeconomic impact of remote work. We build a model where firms trade off productivity losses against cost savings associated with remote work. We show that the expansion of remote work raises profitability and encourages firm entry, but shifts the distribution toward smaller firms. Entry barriers are therefore key in determining aggregate productivity and overall welfare effects.

The third chapter studies how the generality of knowledge, its applicability across technologies, shapes firms’ innovation strategies, market structure, and growth. I build an endogenous growth model and show that (1) market leaders prefer firm-specific R&D, and followers rely on general R&D to catch up; (2) the gap in innovation generality between them follows a U-shaped pattern with market concentration. Evidence from variation in state-level non-compete enforceability supports the model’s spillover mechanism. The findings highlight a novel growth policy: promoting general R&D, especially among leaders, is growth-enhancing.

Authors: Shi, C

• DOI: 10.5287/ora-yemo82dw2
• Type of award: DPhil
• Level of award: Doctoral
• Awarding institution: University of Oxford
• Language: English