Maxwell Rong
I am a postdoctoral scholar at the Stanford Center on Poverty and Inequality. I received a PhD in Economics from Stanford in 2023.
I work on topics in labor economics and household finance.
Contact Info
Center on Poverty and Inequality
30 Alta Rd
Stanford, CA 94305
Email: mrong@stanford.edu
Research Papers
An extensive literature documents rent sharing between workers and firms: firms pass through performance shocks to earnings, which can be rationalized by monopsony power arising from imperfect worker mobility. I test this theory by studying coworking couples: married couples who share an employer. Using Norwegian administrative data, I find that coworking wives experience less generous rent sharing, having lower income growth conditional on the firm’s performance shock. This translates to large differences in household income dynamics: coworking couples face lower income growth and higher risk. Firms exploit the lower mobility of coworking couples to engage in less generous rent sharing.
I study the importance of liquid savings for smoothing consumption in the face of income shocks. I take advantage of a unique institutional feature of certain US retirement accounts, including Individual Retirement Accounts (IRAs): prior to the age of 59.5, withdrawals from these accounts are subject to an additional 10% tax penalty to discourage early withdrawal. Thus, IRAs undergo a sharp and predictable change in liquidity at age 59.5. Using survey data from the Health and Retirement Study (HRS), I document 3 facts. First, annual withdrawals from IRAs increase sharply by $1,500 on average after age 59.5. Second, households with low liquid wealth in the form of checking and savings deposits have the largest proportional increases in withdrawals. Finally, IRA withdrawals increase in response to falls in income, but only for those with low liquid wealth. Using consumption data from the CAMS supplement to the HRS, I quantify how the increased liquidity of IRAs after age 59.5 helps households insure consumption against income shocks.
Work in Progress
"Man-Cessions" and the Decline of Labor Unions
Using historical Current Population Survey data, I document a novel fact: after 1979, male unemployment became significantly more cyclical than female. A one percentage point increase in state unemployment rates increases the probability that a man is unemployed by 0.14 percentage points more after 1979 relative to before. I hypothesize that the reason for this increase is the drastic decline in male unionization rates from the 1980s to the present. I show that due to the drastic decrease in male unionization relative to female, even a small difference in union cyclicality can explain a great deal of the gender unemployment cyclicality gap.