With Ledo in Silverton, CO
Current Position
Associate Professor in the School of Economics at Drexel University.
Research Interests
My research is primarily focused on macroeconomics and labor. Specifically, I have written about job search and unemployment, the role of expectations and beliefs in driving aggregate fluctuations, and the effects of policies such as non-compete bans on economic outcomes. Much of this work emphasizes the role of information in accounting for observed phenomena in the labor market and how technology shapes labor market outcomes at the individual and aggregate levels.
I also have a long-standing interest in environmental conservation. I have several on-going projects in this area, including an archival project that seeks to understand the long-term effects of the CCC on enrollees' engagement with environmentalism and a project on how air pollution affects support for environmental policy.
Separately, I have written on trade policy, media content analysis, and technological addiction.
For more information see my Research Statement and CV.
Contact Information
(215) 895-2540
tristan.l.potter [at] drexel.edu
Associate Professor in the School of Economics at Drexel University.
Research Interests
My research is primarily focused on macroeconomics and labor. Specifically, I have written about job search and unemployment, the role of expectations and beliefs in driving aggregate fluctuations, and the effects of policies such as non-compete bans on economic outcomes. Much of this work emphasizes the role of information in accounting for observed phenomena in the labor market and how technology shapes labor market outcomes at the individual and aggregate levels.
I also have a long-standing interest in environmental conservation. I have several on-going projects in this area, including an archival project that seeks to understand the long-term effects of the CCC on enrollees' engagement with environmentalism and a project on how air pollution affects support for environmental policy.
Separately, I have written on trade policy, media content analysis, and technological addiction.
For more information see my Research Statement and CV.
Contact Information
(215) 895-2540
tristan.l.potter [at] drexel.edu
In progress
Pessimism and the Incidence of Non-Compete Agreements (w/ B. Hobijn and A. Kurmann)
Planting the Seeds of Environmentalism: How the Civilian Conservation Corps Shaped Enrollees' Career Trajectories and Green Innovation
Planting the Seeds of Environmentalism: How the Civilian Conservation Corps Shaped Enrollees' Career Trajectories and Green Innovation
Working papers
The Magnitude and Durability of the Effect of Air Pollution on Support for Environmental Policy [draft available upon request]
How do elevated levels of air pollution affect individuals’ support for environmental policy? To study this question, I merge daily air quality readings from thousands of monitoring stations nationwide with restricted-use data on individuals’ county of residence and views on environmental policy from the General Social Survey. The merged data allow me to identify the magnitude and persistence of the effects of air pollution on support for environmental policy. I find that prolonged exposure to elevated levels of PM10 (particulate pollution) and SO2 (sulfur gas) are positively associated with a view that the government should be spending more on improving and protecting the environment. However, these effects disappear almost immediately—within one month of exposure to elevated pollutant concentrations—suggesting that environmental crises have only a short-lived effect on support for environmental policy.
Demographic Correlates of Humanizing Media Coverage of Homicide: Evidence from the Boston Globe, 1976-1984 (w/ E. Ocasio)
[Database/Replication Files]
Media coverage of violent crime both reflects and shapes how society perceives members of different demographic groups and subgroups. Measuring how coverage varies across these groups through an intersectional lens can thus provide nuanced insight into public perceptions of different groups’ humanity. We merge FBI data on Massachusetts homicides from 1976-1984 with Boston Globe articles to study how race, age, and sex of homicide victims and offenders---as well as the interactions of these characteristics---correlate with humanizing media coverage, conditional on detailed circumstantial factors. We uncover patterns of differential coverage across groups: (i) Among male victims, whites are significantly more likely to receive humanizing coverage than blacks; (ii) there is no significant difference in coverage across races for female victims, except those aged 18-29, among whom blacks receive less humanizing coverage; (iii) female and juvenile victims receive more humanizing coverage; and (iv) race/sex of the offender do not correlate with coverage.
How do elevated levels of air pollution affect individuals’ support for environmental policy? To study this question, I merge daily air quality readings from thousands of monitoring stations nationwide with restricted-use data on individuals’ county of residence and views on environmental policy from the General Social Survey. The merged data allow me to identify the magnitude and persistence of the effects of air pollution on support for environmental policy. I find that prolonged exposure to elevated levels of PM10 (particulate pollution) and SO2 (sulfur gas) are positively associated with a view that the government should be spending more on improving and protecting the environment. However, these effects disappear almost immediately—within one month of exposure to elevated pollutant concentrations—suggesting that environmental crises have only a short-lived effect on support for environmental policy.
Demographic Correlates of Humanizing Media Coverage of Homicide: Evidence from the Boston Globe, 1976-1984 (w/ E. Ocasio)
[Database/Replication Files]
Media coverage of violent crime both reflects and shapes how society perceives members of different demographic groups and subgroups. Measuring how coverage varies across these groups through an intersectional lens can thus provide nuanced insight into public perceptions of different groups’ humanity. We merge FBI data on Massachusetts homicides from 1976-1984 with Boston Globe articles to study how race, age, and sex of homicide victims and offenders---as well as the interactions of these characteristics---correlate with humanizing media coverage, conditional on detailed circumstantial factors. We uncover patterns of differential coverage across groups: (i) Among male victims, whites are significantly more likely to receive humanizing coverage than blacks; (ii) there is no significant difference in coverage across races for female victims, except those aged 18-29, among whom blacks receive less humanizing coverage; (iii) female and juvenile victims receive more humanizing coverage; and (iv) race/sex of the offender do not correlate with coverage.
Publications
Destabilizing Search Technology
Journal of Monetary Economics (2024)
Modern job search technologies enable job seekers to monitor the arrival of newly posted vacancies. This paper conceptualizes search as a monitoring decision and shows that monitoring technologies give rise to a novel source of strategic complementarities in search and can thus lead to potentially destabilizing multiplicity of equilibria. The model provides a theory of belief-driven fluctuations in labor supply that can permanently shift the path of the economy, and offers an explanation for persistently weak wage growth despite low unemployment during the recovery from the Great Recession.
On the Inefficiency of Non-Competes in Low-Wage Labor Markets (w/ B. Hobijn and A. Kurmann)
Economica (2024)
We study the efficiency of non-compete agreements (NCAs) in an equilibrium model of labor turnover. The model is consistent with empirical studies showing that NCAs reduce turnover and average wages for low-wage workers. The model also predicts that, by reducing turnover, NCAs raise recruitment and employment. We show that optimal NCA policy (i) is characterized by a Hosios-like condition that balances the benefits of higher employment against the costs of inefficient congestion and poaching; (ii) depends critically on the minimum wage; and (iii) alone cannot always achieve the constrained-efficient allocation—a result that also holds for optimal minimum wage policy—yet with both policies, efficiency is always attainable. To guide policymakers, we derive a sufficient statistic in the form of an easily computed employment threshold above which NCAs are necessarily inefficiently restrictive, and show that employment levels in current low-wage U.S. labor markets typically exceed this threshold. Finally, we calibrate the model and show that Oregon’s 2008 NCA ban for low-wage workers modestly increased welfare (by roughly 0.1%), and that if policymakers had also raised the minimum wage to its optimal level conditional on the enacted NCA ban (a 30% increase), welfare would have increased more substantially—by over 1%.
Anticipated Productivity and the Labor Market (w/ R. Chahrour and S. Chugh) [Replication Files]
Quantitative Economics (2023)
We identify the main shock driving fluctuations in long-horizon productivity expectations, consistent with theories of TFP news. The identified shock induces strong comovement patterns in output, consumption, investment, employment, and stock prices even though TFP does not change significantly for more than two years. A labor search model in which wages are determined by a cash-flow sharing rule, rather than the present value of match surplus, matches the observed responses to the news shock. The model also matches the empirical patterns of vacancies, labor force participation, hours, and job-finding rates. The proposed wage rule is consistent with empirical responses of wages to both anticipated and unanticipated productivity changes.
Down the Rabbit Hole: Habit-formation in Internet Use among Unemployed Workers
Economics Letters (2022)
This paper tests for habit-formation in leisure-related internet use (LIU) using time-diary data from a panel of unemployed workers. Drawing on insights from the consumption-habit literature, I use a model of intertemporal time allocation to derive a test for habit-formation in leisure activities. The data reveal strong evidence of habit-formation in LIU among the Generation-X age cohort. With the exception of reading, I find no evidence of habit-formation in offline leisure.
Wage Offers and On-the-job Search (w/ D. Bernhardt)
Canadian Journal of Economics (2022)
We study the wage-setting problem of an employer with private information about demand for its product when workers can engage in costly on-the-job search. Employers understand that low wage offers may convey bad news that induces workers to search. The unique perfect sequential equilibrium wage strategy is characterized by: (i) pooling by intermediate-revenue employers on a common wage that just deters search; (ii) discontinuously lower revealing offers by low-revenue employers for whom the benefit of deterring search fails to warrant the required high pooling wage; and (iii) high revealing offers by high-revenue employers seeking to deter aggressive raiders.
The Discouragement Rate: An Index of Discouragement-Induced Hardship [ungated]
Applied Economics Letters (2021)
In 1979, the Levitan Commission identified discouragement as one of three main sources of economic hardship, and recommended the development of an index to measure the extent of the problem. Over 40 years later, no such index exists. This letter proposes a simple index of discouragement-induced hardship and documents its evolution over time and across demographic groups. Using the index, I document several novel empirical phenomena: (i) the existence of a large and persistent racial discouragement gap, (ii) a secular decline in discouragement among women, (iii) a large and seemingly permanent rise in discouragement among men following the Great Recession, and (iv) a secular rise in discouragement among high-school graduates.
Learning and Job Search Dynamics during the Great Recession [ungated]
Journal of Monetary Economics (2021)
Krueger and Mueller (2011) document that search effort declined with unemployment duration during the Great Recession. I show that variation in past effort explains this decline. Furthermore, job offers increase subsequent effort. These facts are inconsistent with standard models of search. I introduce a model of sequential search in which workers are uncertain about the offer arrival process and learn through search. Evolving beliefs influence search through two competing channels: the opportunity cost of leisure and the option value of unemployment. Estimation of the model indicates that learning provides a strong account of job search dynamics during the Great Recession.
Misallocation and Productivity Effects of the Smoot-Hawley Tariff (w/ E. Bond, M. Crucini and J. Rodrigue)
Review of Economic Dynamics (2013)
Using a newly created microeconomic archive of US imports at the tariff line level for 1930–1933, we construct industry-level tariff wedges incorporating the input–output structure of US economy and the heterogeneous role of imports across sectors of the economy. We use these wedges to show that the average tariff rate of 46% in 1933 substantially understated the true impact of the Smoot–Hawley (SH) tariff structure, which we estimate to be equivalent to a uniform tariff rate of 70%. We use these wedges to calculate the impact of the Smoot–Hawley tariffs on total factor productivity and welfare. In our benchmark parameterization, we find that tariff protection reduced TFP by 1.2% relative to free trade prior to the Smoot–Hawley legislation. TFP fell by an additional 0.5% between 1930 and 1933 due to Smoot–Hawley. We also conduct counterfactual policy exercises and examine the sensitivity of our results to changes in the elasticity of substitution and the import share. A doubling of the substitution elasticities yields a TFP decline of almost 5% relative to free trade, with an additional reduction due to SH of 0.4%.
Journal of Monetary Economics (2024)
Modern job search technologies enable job seekers to monitor the arrival of newly posted vacancies. This paper conceptualizes search as a monitoring decision and shows that monitoring technologies give rise to a novel source of strategic complementarities in search and can thus lead to potentially destabilizing multiplicity of equilibria. The model provides a theory of belief-driven fluctuations in labor supply that can permanently shift the path of the economy, and offers an explanation for persistently weak wage growth despite low unemployment during the recovery from the Great Recession.
On the Inefficiency of Non-Competes in Low-Wage Labor Markets (w/ B. Hobijn and A. Kurmann)
Economica (2024)
We study the efficiency of non-compete agreements (NCAs) in an equilibrium model of labor turnover. The model is consistent with empirical studies showing that NCAs reduce turnover and average wages for low-wage workers. The model also predicts that, by reducing turnover, NCAs raise recruitment and employment. We show that optimal NCA policy (i) is characterized by a Hosios-like condition that balances the benefits of higher employment against the costs of inefficient congestion and poaching; (ii) depends critically on the minimum wage; and (iii) alone cannot always achieve the constrained-efficient allocation—a result that also holds for optimal minimum wage policy—yet with both policies, efficiency is always attainable. To guide policymakers, we derive a sufficient statistic in the form of an easily computed employment threshold above which NCAs are necessarily inefficiently restrictive, and show that employment levels in current low-wage U.S. labor markets typically exceed this threshold. Finally, we calibrate the model and show that Oregon’s 2008 NCA ban for low-wage workers modestly increased welfare (by roughly 0.1%), and that if policymakers had also raised the minimum wage to its optimal level conditional on the enacted NCA ban (a 30% increase), welfare would have increased more substantially—by over 1%.
Anticipated Productivity and the Labor Market (w/ R. Chahrour and S. Chugh) [Replication Files]
Quantitative Economics (2023)
We identify the main shock driving fluctuations in long-horizon productivity expectations, consistent with theories of TFP news. The identified shock induces strong comovement patterns in output, consumption, investment, employment, and stock prices even though TFP does not change significantly for more than two years. A labor search model in which wages are determined by a cash-flow sharing rule, rather than the present value of match surplus, matches the observed responses to the news shock. The model also matches the empirical patterns of vacancies, labor force participation, hours, and job-finding rates. The proposed wage rule is consistent with empirical responses of wages to both anticipated and unanticipated productivity changes.
Down the Rabbit Hole: Habit-formation in Internet Use among Unemployed Workers
Economics Letters (2022)
This paper tests for habit-formation in leisure-related internet use (LIU) using time-diary data from a panel of unemployed workers. Drawing on insights from the consumption-habit literature, I use a model of intertemporal time allocation to derive a test for habit-formation in leisure activities. The data reveal strong evidence of habit-formation in LIU among the Generation-X age cohort. With the exception of reading, I find no evidence of habit-formation in offline leisure.
Wage Offers and On-the-job Search (w/ D. Bernhardt)
Canadian Journal of Economics (2022)
We study the wage-setting problem of an employer with private information about demand for its product when workers can engage in costly on-the-job search. Employers understand that low wage offers may convey bad news that induces workers to search. The unique perfect sequential equilibrium wage strategy is characterized by: (i) pooling by intermediate-revenue employers on a common wage that just deters search; (ii) discontinuously lower revealing offers by low-revenue employers for whom the benefit of deterring search fails to warrant the required high pooling wage; and (iii) high revealing offers by high-revenue employers seeking to deter aggressive raiders.
The Discouragement Rate: An Index of Discouragement-Induced Hardship [ungated]
Applied Economics Letters (2021)
In 1979, the Levitan Commission identified discouragement as one of three main sources of economic hardship, and recommended the development of an index to measure the extent of the problem. Over 40 years later, no such index exists. This letter proposes a simple index of discouragement-induced hardship and documents its evolution over time and across demographic groups. Using the index, I document several novel empirical phenomena: (i) the existence of a large and persistent racial discouragement gap, (ii) a secular decline in discouragement among women, (iii) a large and seemingly permanent rise in discouragement among men following the Great Recession, and (iv) a secular rise in discouragement among high-school graduates.
Learning and Job Search Dynamics during the Great Recession [ungated]
Journal of Monetary Economics (2021)
Krueger and Mueller (2011) document that search effort declined with unemployment duration during the Great Recession. I show that variation in past effort explains this decline. Furthermore, job offers increase subsequent effort. These facts are inconsistent with standard models of search. I introduce a model of sequential search in which workers are uncertain about the offer arrival process and learn through search. Evolving beliefs influence search through two competing channels: the opportunity cost of leisure and the option value of unemployment. Estimation of the model indicates that learning provides a strong account of job search dynamics during the Great Recession.
Misallocation and Productivity Effects of the Smoot-Hawley Tariff (w/ E. Bond, M. Crucini and J. Rodrigue)
Review of Economic Dynamics (2013)
Using a newly created microeconomic archive of US imports at the tariff line level for 1930–1933, we construct industry-level tariff wedges incorporating the input–output structure of US economy and the heterogeneous role of imports across sectors of the economy. We use these wedges to show that the average tariff rate of 46% in 1933 substantially understated the true impact of the Smoot–Hawley (SH) tariff structure, which we estimate to be equivalent to a uniform tariff rate of 70%. We use these wedges to calculate the impact of the Smoot–Hawley tariffs on total factor productivity and welfare. In our benchmark parameterization, we find that tariff protection reduced TFP by 1.2% relative to free trade prior to the Smoot–Hawley legislation. TFP fell by an additional 0.5% between 1930 and 1933 due to Smoot–Hawley. We also conduct counterfactual policy exercises and examine the sensitivity of our results to changes in the elasticity of substitution and the import share. A doubling of the substitution elasticities yields a TFP decline of almost 5% relative to free trade, with an additional reduction due to SH of 0.4%.