Grant

Impact of the great rise in finance on resource allocation and employment

Project Summary:

The authors will investigate how large increases in household debt affect the allocation of labor across geographical areas and industries. This project is a continuation of their previous research on household debt, and will result in the creation of a new historical county-level panel of household balance sheets and industry-specific employment—a harmonized data set (1946-2012) that will be available to other researchers. A second contribution is a test of whether the run-up in debt led to imbalances in employment, a corollary to the findings in Mian and Sufi (2014) about employment shocks during the Great Recession. A better understanding of the interaction between household debt and structural changes in the allocation of labor could help researchers better identify and understand the root causes behind the labor market slowdown.

Biography

Amir Sufi is a member of the Washington Center for Equitable Growth's Research Advisory Board. He is also the Chicago Board of Trade Professor of Finance at the University of Chicago Booth School of Business, and a Research Associate at the National Bureau of Economic Research. He serves as an associate editor for the American Economic Review and the Quarterly Journal of Economics.

Sufi's research focuses on finance and macroeconomics. He has articles published in the American Economic Review, the Journal of Finance, and the Quarterly Journal of Economics. His recent research on household debt and the economy has been profiled in the Economist, the Financial Times, the New York Times, and the Wall Street Journal. It has also been presented to policymakers at the Federal Reserve; the Senate Committee on Banking, Housing, & Urban Affairs; and the White House Council of Economic Advisers. This research forms the basis of his book co-authored with Atif Mian: “House of Debt: How They (and You) Caused the Great Recession and How We Can Prevent It from Happening Again,” which was published by the University of Chicago Press in 2014.

Sufi graduated Phi Beta Kappa with honors from the Walsh School of Foreign Service at Georgetown University with a bachelor's degree in economics. He earned a Ph.D. in economics from the Massachusetts Institute of Technology, where he was awarded the Solow Endowment Prize for Graduate Student Excellence in Teaching and Research. He joined the Chicago Booth faculty in 2005.

Selected Publications