Employment: Assistant Professor of Economics, Central University of Finance and Economics
Education: University of Minnesota, Ph.D. (2020)
Fields: Macroeconomics, Labor Economics, Development Economics
E-Mail: [email protected]
Curriculum Vitae: March 2024
Working Papers
[1] The Macroeconomic Consequences of Parental Investment Competition for College Admissions (with Lichen Zhang)
[draft coming soon]
Abstract: This paper studies the role of competition for college admissions in driving parents' incentives to invest in their children's human capital and the subsequent child outcomes, as well as the implications for child development policies. We incorporate competition for limited college seats---where admission likelihood depends on a child's human capital relative to their cohort---into a heterogeneous-agent life-cycle model featuring endogenous pre-college human capital formation. Our model aligns with key observed parental investment patterns across varying parental income and child skill levels in Chinese data. We show that for an average household, college competition incentive drives 60% of parental monetary investment, which does not effectively contribute to children's labor productivity as workers. Furthermore, the proportion of parental investment driven by competition is disproportionately large for children with abilities near the college admission threshold. We then quantitatively evaluate the aggregate, welfare, and distributional effects of regulating parental investment competition from both positive and normative perspectives. Compared to the private tutoring ban implemented by the Chinese government, an optimal private tutoring tax balances curbing competition incentive and minimizing human capital losses, ultimately generating significantly larger welfare gains.
[2] A Macroeconomic Analysis of the Drivers and Consequences of R&D Investments Growth in China (with Chengcheng Jia)
[draft coming soon]
Abstract: This paper studies the drivers and macroeconomic consequences of China's dramatic surge in R&D investment within a unified framework. We develop an equilibrium heterogeneous firm model with endogenous R&D decisions and structurally estimate the dynamic model to fit the empirical distribution of R&D and productivity growth in China in the early 2000s. We incorporate several aggregate shocks driven by technological, demographic, and policy factors into the stationary state and quantify the equilibrium impacts of each shock. We find that how the increase in total R&D resulting from a shock is distributed across individual firms determines its impact on aggregate productivity. For example, while the notch-based R&D policies account for nearly a third of the rise in R&D spending, the impact on aggregate firm productivity is quantitatively negligible because the policy primarily grants tax incentives to a small group of firms whose productivity elasticity of R&D is small. The increased share of skilled workers in the labor force is much more effective because it lowers R&D costs and benefits most R&D-active firms.
[3] On the Distributional Effects of Economic Transition (with Haiyan Ding, Zhe Fu, and Hui He)
[draft available upon request]
[4] On the Aggregate and Distributional Effects of Innovation Policies (with Chengcheng Jia)
[draft, February 2022]
Publications
[1] Firm Dynamics and SOE Transformation During China's Economic Reform (with Chengcheng Jia)
Journal of International Money and Finance, Volume 127, October 2022, 102672
[draft] [journal link]
[2] A Comment on "Wealth Inequality and Endogenous Growth" by Byoungchan Lee (with Chengcheng Jia)
Journal of Monetary Economics, Volume 133, January 2023, Pages 149-155
[draft] [journal link]
Older Papers
[1] Understanding the Secular Decline in New Business Creation (with Lichen Zhang)
[draft]
Education: University of Minnesota, Ph.D. (2020)
Fields: Macroeconomics, Labor Economics, Development Economics
E-Mail: [email protected]
Curriculum Vitae: March 2024
Working Papers
[1] The Macroeconomic Consequences of Parental Investment Competition for College Admissions (with Lichen Zhang)
[draft coming soon]
Abstract: This paper studies the role of competition for college admissions in driving parents' incentives to invest in their children's human capital and the subsequent child outcomes, as well as the implications for child development policies. We incorporate competition for limited college seats---where admission likelihood depends on a child's human capital relative to their cohort---into a heterogeneous-agent life-cycle model featuring endogenous pre-college human capital formation. Our model aligns with key observed parental investment patterns across varying parental income and child skill levels in Chinese data. We show that for an average household, college competition incentive drives 60% of parental monetary investment, which does not effectively contribute to children's labor productivity as workers. Furthermore, the proportion of parental investment driven by competition is disproportionately large for children with abilities near the college admission threshold. We then quantitatively evaluate the aggregate, welfare, and distributional effects of regulating parental investment competition from both positive and normative perspectives. Compared to the private tutoring ban implemented by the Chinese government, an optimal private tutoring tax balances curbing competition incentive and minimizing human capital losses, ultimately generating significantly larger welfare gains.
[2] A Macroeconomic Analysis of the Drivers and Consequences of R&D Investments Growth in China (with Chengcheng Jia)
[draft coming soon]
Abstract: This paper studies the drivers and macroeconomic consequences of China's dramatic surge in R&D investment within a unified framework. We develop an equilibrium heterogeneous firm model with endogenous R&D decisions and structurally estimate the dynamic model to fit the empirical distribution of R&D and productivity growth in China in the early 2000s. We incorporate several aggregate shocks driven by technological, demographic, and policy factors into the stationary state and quantify the equilibrium impacts of each shock. We find that how the increase in total R&D resulting from a shock is distributed across individual firms determines its impact on aggregate productivity. For example, while the notch-based R&D policies account for nearly a third of the rise in R&D spending, the impact on aggregate firm productivity is quantitatively negligible because the policy primarily grants tax incentives to a small group of firms whose productivity elasticity of R&D is small. The increased share of skilled workers in the labor force is much more effective because it lowers R&D costs and benefits most R&D-active firms.
[3] On the Distributional Effects of Economic Transition (with Haiyan Ding, Zhe Fu, and Hui He)
[draft available upon request]
[4] On the Aggregate and Distributional Effects of Innovation Policies (with Chengcheng Jia)
[draft, February 2022]
Publications
[1] Firm Dynamics and SOE Transformation During China's Economic Reform (with Chengcheng Jia)
Journal of International Money and Finance, Volume 127, October 2022, 102672
[draft] [journal link]
[2] A Comment on "Wealth Inequality and Endogenous Growth" by Byoungchan Lee (with Chengcheng Jia)
Journal of Monetary Economics, Volume 133, January 2023, Pages 149-155
[draft] [journal link]
Older Papers
[1] Understanding the Secular Decline in New Business Creation (with Lichen Zhang)
[draft]