UCLA Professor Will Rafey contributes to the writing of the Fifth National Climate Assessment released by the White House. The report highlights the widespread negative effects of climate change with the most damaging effects for low-income communities.
The full report can be found here.
Professor Rafey’s contribution was also discussed in the following UCLA Newsroom article, found here.
By Jacob Kohlhepp
Full article available here.
Jacob Kohlhepp
Anyone who has shopped at a Costco and a corner convenience store knows that firms selling the same products assign tasks to workers differently and have dramatically different levels of profitability. Economists have long recognized via case studies and theoretical work that some of these differences are due to differences in organizational capability. For example, some companies use sophisticated workforce management software while others use a clipboard. But are these individual examples reflective of a larger reality? And if so, how does incorporating organizational capabilities change our understanding of economics?
In his paper “The Inner Beauty of Firms,” Professor Jacob Kohlhepp (UNC Chapel Hill and UCLA graduate) answers these questions using millions of task assignments across hundreds of hair salons. He finds that salons using the same management software assign work very differently. At some salons, workers essentially operate as miniature salons with little task specialization. At others, workers play a specific role as part of a task specialized team. Further, task specialization is positively associated with firm performance. Specialized salons earn more revenue per minute, are larger, and set higher prices. At least for hair salons, there is evidence that organizational capability plays a large role in economic outcomes.
He then builds a new model where competing firms with different organizational capabilities choose both who to hire and how to assign tasks. Firms strategically design the jobs of each employee based on individual skills, prevailing wages, consumer demand for quality, and importantly, a firm-specific organizational cost. He develops a procedure which uses machine learning to link the theory with the data, and estimate the firm’s organizational costs, worker skills and worker wages.
Using the estimated model, Professor Kohlhepp reexamines classic economic policies, using Manhattan’s hair salon industry as a laboratory. He starts with a minimum wage. When the minimum wage is increased from $15 to $20, firms which initially employ many minimum wage workers see a cost increase. All workers initially at these firms, minimum-wage or not, are disadvantaged. Internally, firms layoff minimum wage workers and the remaining workers pick up the slack by performing the leftover tasks. In this way, the minimum wage spills over onto non-minimum wage workers, generating wage increases for some and wage decreases for others that depend on the context.
He also considers a sales tax cut. When the sales tax decreases from 4.5% to 0%, workers flow towards more organizationally capable salons increasing productivity. In addition, cutting the sales tax makes producing a high quality product more profitable. This induces firms of all capabilities to increase specialization, which raises worker productivity across the market.
Both the minimum wage and sales tax cut tell a similar story: even firms which look similar on paper can be quite different in terms of their organization capabilities, and accounting for this changes what we predict even from classic economic policies.
The paper ‘Index Funds, Asset Prices, and the Welfare of Investors’ by UCLA Professor Bill Zame and coauthor Martin Schmalz was featured in the Bloomberg podcast. The podcast featuring the article can be found here.
The paper ‘Index Funds, Asset Prices, and the Welfare of Investors’ by UCLA Professor Bill Zame and coauthor Martin Schmalz was featured in the Anderson Review. The article featuring the paper can be found here.
UCLA Professor Till Von Wachter has received an award from The California Collaborative for Pandemic Recovery and Readiness Research for their research on how workers fared under different unemployment insurance programs during the COVID-19 pandemic.The research will help to address evidence gaps in how the COVID-19 pandemic affected the health and wellbeing of communities throughout California.
Biography: Aravinth Ruppa, a second-year undergraduate student from the central coast of California, is currently majoring in Economics with a pre-medicine focus. He intends to pursue a double major in Microbiology, Immunology & Molecular Genetics. He plans to blend his unique background in economics and medicine to bring about positive impact on the healthcare industry to improve access to care for all patients. Aravinth is also a 3rd degree black belt in Karate and has been practicing martial arts for the last 14 years. In his free time he enjoys playing soccer, hiking, and going to the beach. Aravinth looks forward to continuing to explore Los Angeles and try all the different types of food the city has to offer.
Future Plans: In the upcoming academic year, Aravinth will continue his research in the Economics department, focusing on investigating water pollution levels and the corresponding water legislation. Additionally, he will be working in the cardiology laboratory at the Geffen School of Medicine, utilizing molecular biology research techniques to study therapies aimed at enhancing post-heart attack repair. Following his undergraduate studies, Aravinth intends to further his education by pursuing an MD (Doctor of Medicine) and an MBA (Master of Business Administration) in a medical school dual degree program. Aravinth’s aspiration is to blend his interests in medicine and healthcare to initiate meaningful change and improve access to care for patients, regardless of their socioeconomic status.
What this scholarship means to me? I feel honored and so thankful to have been chosen for the Venu and Ana Kotamraju Endowed Scholarship. I would like to extend my deepest gratitude to Mr. and Mrs. Kotamraju for their incredible generosity, which has given me confidence to continue to seek opportunities to gain tools that I can use to make a positive impact. This scholarship not only alleviates financial burdens but also inspires me to continue to learn and grow. I am truly appreciative of the chance to pursue my educational goals with the assistance of this scholarship, and I am committed to making the most of this privilege to achieve my aspirations.
Biography: Jason Lee is a fourth-year at UCLA, majoring in Economics and is committed to going into law school after graduation. He attained his passion for law after having completed three internships at two law firms and a courthouse, where he was able to get personally close to many people working in the field who have not only given him advice about the field but allowed him to see the much more humanistic parts of law that captivated him to begin with. For the school year of 2023-2024, he will continue involving himself in the legal field as a Research Assistant at the UCLA School of Law. At school he further tries to involve himself in student affairs, holding a position on the Undergraduate Council and as a Director of Finance for USAC’s Academic Affairs Commission. Apart from school, he thoroughly enjoys playing guitar, and his parents’ love serves as his greatest motivation.
Future Plans: Jason Lee strives to go into law school after his undergraduate education but aims to take a year of work before doing so. He believes that a knowledgeable and wide worldview is important for such a coordination and client-heavy field, and for the year of 2023-2024, he is applying for fellowships and work opportunities before entering to law school.
What this scholarship means to me?: Being recognized for the Robert D. and Margaret A. Wark Memorial Scholarship is a great honor. I have dedicated myself to succeed and build myself at college, and this award motivates me to work harder so that I may contribute my own to this academic community as well. I thank Robert D. and Margaret A. Wark for lending me this inspiration and positioning me well in my finances so that I may go forward after college and continue building my career.
Biography: Sukie Yeung is a rising junior majoring in Business Economics, with plans to minor in Statistics and Data Science Engineering. Originally from Vancouver, she is committed to driving impact through her pursuit of management consulting. On campus, Sukie serves as Vice President of the Global Research Consulting Group, partnering with local and international non-profits to promote Environmental, Social, and Governance (ESG) initiatives. Furthermore, she interns with the LA Metro Chapter of Ascend to amplify AAPI representation in the realms of entertainment, finance, and business services. Outside of her professional pursuits, Sukie is an avid snowboarder and enjoys tackling challenging piano pieces.
Future Plans: This Fall, Sukie is focused on pursuing opportunities within management consulting and related fields, enthusiastic about the potential to make a meaningful impact through her work. In the long term, she intends to build a career within the consulting industry and remains open to the possibility of an MBA after a few years of work experience.
What this scholarship means to me? I am incredibly humbled and grateful to Donald Lipschutz and donors for their generosity and support. This scholarship means a lot to me, as it not only eases the financial burden of college, but also serves as a recognition of my dedication to my education and perseverance in the face of challenges. The scholarship embodies the incredible network of alumni and mentors who are invested in my success; I am committed to making the most of this opportunity for my personal growth and to continue to make meaningful contributions to the UCLA community.
