“We offer weekly pay”: Paycheck frequency and the need for liquidity of American workers [Draft]
Earlier circulated as "Paycheck frequencies, wages, and the need for liquidity of workers in the U.S."
January 2025
Abstract
Using the U.S. micro data, I document a novel fact that American workers who receive weekly paychecks tend to earn lower hourly wages and have less
liquid wealth than those who earn every two weeks. To explain these stylized facts, I build a labor search model incorporating workers’ liquidity constraints
and featuring paycheck frequency as a job amenity that comes with a compensating wage differential. Workers with less liquidity are willing to accept jobs
that pay more frequently even though they earn lower wages on average because they can better smooth consumption between weeks in a month without
the need to resort to expensive loans. The interaction between the equilibrium distribution of liquidity and search frictions plays a key role in underpinning
wage inequality across pay frequencies.
Working papers
Unemployment benefits and consumption smoothing: Cross-state study from the U.S. [Draft]
January 2024
Abstract
Unemployment insurance programs have three common parameters: weekly benefit amount, potential benefit duration, and payment frequency. Exploiting
variations in these dimensions across American states over time as well as deterministic kinks in the policy schedule, I study their effects on the ability of
unemployed workers to smooth their consumption relative to that in employment periods. Using quarterly micro data, I find that weekly benefit amount
plays the most important role in helping unemployed workers smooth consumption, namely in food and nondurables. Payment frequency also has a modest
smoothing effect, while potential benefit duration rarely plays a significant role.
Work in Progress
Trade Liberalization and the Supply of Productive Skills
Search and Temporary Jobs: Effects on Wage Inequality of Fixed-Term Employment
Pre-PhD Research
The Cost Channel Effect of Monetary Transmission: How Effective Is the ECB's Low Interest Rate Policy for Increasing Inflation?
with Dorothea Schäfer and Andreas Stephan
Discussion Paper 1654, DIW Berlin, 2017
Determinants of Net Interest Margin of Commercial Banks in Vietnam
with Vu Thi Dan Tra
Journal of Economics and Development, 17(2), 2015