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Meet the New Economists: Six Bright Additions Join the Economics Faculty

The Department of Economics is pleased to welcome six new faculty members who have joined our ranks beginning Fall 2011.  Pictured above (from left): Matthias Kehrig, Caroline Thomas, Marika Cabral, Andrew Glover, Haiqing Xu, Leigh Linden


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Marika Cabral (Public Finance, Health Economics)

Marika is looking forward to joining the UT economics department, having completed her Ph.D. at Stanford University last spring.  Her dissertation focused on topics related to health insurance and taxation.  Marika was first introduced to economics as an undergraduate at UC San Diego, and she enjoys studying and teaching economics because it provides a formal framework to understand human behavior and to evaluate the impact of public policy.

Marika’s research lies in the areas of health economics, public finance, and industrial organization.   Much of her work focuses on health-insurance markets.  Her research has shown that these markets can break down when patients can delay treatments just long enough to sign up for more insurance coverage.  More generally, her results suggest that policy tools such as open enrollment periods, waiting periods, and contracting on pre-existing conditions can get around the market breakdown generated by this strategic delay of treatment.

Marika has also researched the fiscal externality of private Medicare supplemental insurance on public Medicare expenditures.  Her work shows that when elderly individuals are able to “top-up” Medicare coverage with private supplemental insurance, they spend a lot more money on medical treatments, most of which is paid for by the public Medicare system.  This study reveals that large Medicare savings could be achieved by taxing private supplemental insurance policies. Marika has also worked on other topics, including the effect of tax salience on property tax rates and the effect of insurance coverage on preventive care.


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Andrew Glover (Macroeconomics)

Andrew is from Hartford City, Indiana and went to college at Ball State University (David Letterman’s alma mater) before doing his Ph.D. at Minnesota. He started college as a telecommunications major but was drawn to economics due to the disciplined framework it provides for understanding society. He chose to join UT because the department is young and growing, which provides a great environment for research.  Andrew and his wife are excited to live in Austin and enjoy the music, cultural, and outdoor activities that the city offers.

Andrew is a quantitative macroeconomist who uses general equilibrium models to understand puzzling economic regularities and to conduct policy analysis via counter-factual experiments. His work explores how differences between individuals (their age, productivity, or taste for leisure) interact at the microeconomic level to give rise to interesting phenomena in the aggregate economy. His macroeconomic framework has allowed him to investigate how recessions affect people in different stages of their lives, how workers choose to become entrepreneurs and cope with the associated risks, and how informational problems in the labor market can tie one’s opportunities to the abilities of others.

In Andrew’s most recent paper, “A Quantitiative Rat-Race Theory of Labor Market Dynamics,” he studies how the productivity of one group of workers can affect the opportunities available to all other workers when there are informational asymmetries between employers and employees. A classic model of this problem is Akerlof's “Rat Race"; if good workers are also more willing to work, then uninformed firms may require them to supply too many hours in order to deter bad workers from taking high paying jobs. Furthermore, if bad workers suffer a fall in productivity, then good workers may have to work longer hours in the face of flat (or even falling) wages. This theory matches the empirical fact that, in aggregate data, total hours worked and labor productivity (a proxy for wages) are negatively correlated.  It contradicts the intuition that we should “make hay when the sun shines” (i.e., work more when productivity is high). Importantly, this theory predicts that employment subsidies for low-productivity workers may help stabilize employment for others who do not benefit from the subsidy directly.


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Matthias Kehrig (Macroeconomics)

Matthias grew up in Germany in a family where everyone played a musical instrument. After initially toying with the idea of becoming a professional cello player, the bright job prospects in the music industry convinced Matthias to study management instead. But a course in macroeconomics piqued his interest in the theoretical underpinnings of the business world. Matthias says of his decision to study economics, “I liked the math, I liked the idea of describing the real world in formal models, and I liked that you could use these models to answer questions.”   After his undergraduate studies in Cologne and Stockholm, Matthias went on to pursue a graduate degree at Northwestern University where he continued his interest in macroeconomics.

Matthias is interested in how macroeconomic fluctuations impact individual firms differently: Do recessions lead to a shakeout of unproductive firms? Or do these firms crumble under the higher competitive pressure in booms? When do highly productive firms enter the economy and advance the state of technology? To answer these questions, Matthias has used Census plant-level data to establish that there are fewer unproductive firms in booms than recessions. In the future, he plans to quantify how much changes in firm composition drive measured aggregate productivity.

Matthias is excited to join the economics department at UT Austin. As the department is growing and committed to building a great macroeconomics group, he is looking forward to contribute to the active research and learning environment at UT.
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Leigh Linden (Development Economics)

Leigh Linden is thrilled to be back at UT. Both he and his wife are UT graduates. For Leigh, coming back to Austin and being back in the department has been very much like coming home again.  After graduating from UT in 1997 with degrees in economics and mathematics, Leigh attended graduate school at MIT. While there, he took a year off to work on environmental economics issues in the White House’s Council of Economic Advisors during the Clinton administration, and his dissertation work focused on issues in development economics in India. Leigh has always been attracted to economics because as a discipline it provides a rigorous foundation for proscriptive policy analysis. The set of empirical and theoretical models on which all economists base their work provide a rich framework for understanding individual and family decisions, which is a prerequisite for being able to shape effective public policies. Leigh’s work tends to land at the intersection of empirical research on economic behavior and the direct assessment of education policies, which allows him to bridge the gap between research and practice.

Leigh has a joint appointment with LBJ School of Public Affairs and is also affiliated with a number of economic research organizations including the Jameel Poverty Action Lab at MIT, Innovations for Poverty Action, the Bureau for Research and Economic Analysis of Development, and the Institute for the Study of Labor.  He specializes in the fields of development and labor economics, focusing on the microeconomic determinants of income inequality and poverty.

Leigh is particularly interested in the use of educational services and programs to improve the well-being of children from poor families and in the use of randomized evaluations both to test economic theories of human behavior and to assess the efficacy of social programs. His research investigates the economic determinants of the well-being of children, which requires understanding how the provision of educational resources affects human-capital development and how different factors determine the demand for education by children and families.  This work includes evaluations of numerous school-based learning interventions as well as programs designed to encourage school participation.

Leigh has received support from many organizations, including the National Science Foundation, the Spencer Foundation, the William T. Grant Foundation, Atlantic Philanthropies, the Michael and Susan Dell Foundation, the Wallace Foundation, the World Bank, and the Millennium Challenge Corporation.  He has run field projects in many parts of the world, including Colombia, Burkina Faso, Uganda, Afghanistan, India, Pakistan, Nepal, Philippines, and the United States.


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Caroline Thomas (Microeconomic Theory)

Caroline was born in the Lebanon and grew up in Germany and France. She moved to the UK to study philosophy and economics at University College London. There, she developed a particular interest in questions of distributive justice and social choice and went on to do post-graduate studies in Economics. Her early graduate research focused on models of electoral competition and information aggregation, but she soon became fascinated by dynamic game theory which she has used to study the dynamics of information acquisition when individuals interact or compete with each other.

Caroline’s research interests lie in microeconomic theory and game theory. Her current research focuses on strategic experimentation when individuals are in competition with one another. When information about the quality of an option arrives only gradually, how do individuals optimally search for and learn about the best alternative for themselves?  Sometimes an individual needs to spend time learning about the quality of a potential match (a house, a car, a job, a spouse), but he or she can only explore options that are currently on the market. If the individual leaves one option to explore a different one, access to the first may be lost because someone else may have acquired it in the meantime.  There is an inherent tradeoff between learning about the most suitable option and rushing to choose an option before it is taken by someone else.  Caroline’s research investigates whether there are informational benefits from interaction with others in such a situation.

In addition to her work on strategic experimentation in competitive environments, Caroline has also done work on other game-theory topics, including repeated games and multidimensional contests.


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Haiqing Xu (Econometrics)

Haiqing Xu grew up in South China. He received a B.A. in management and an M.A. in economics from Peking University before receiving his Ph.D. from Penn State University.  His research interest is in econometric methodology, and his work focuses on econometric analyses of the strategic behaviors in social networks or industry organizations. He looks forward to continuing these research interests with the students and faculty at UT Austin.

In his job-market paper, titled “Discrete Choice Models With Local Interactions: A Game Theoretical Approach,” Haiqing developed a novel methodology to study social interaction.  Based on the idea that friendship can affect individuals’ choices directly and indirectly (e.g., through a friend of a friend), he uses formal game-theory models to predict how choices that individuals make depend upon the existing social network. Haiqing’s method has potential applications in several areas of sociology, for example peer effects in adolescent risk behaviors or the social stigma associated with obesity.

Haiqing has also already published an econometric theory paper (“Tighter Bounds in Triangular Systems”) in the Journal of Econometrics.  One application of that work is to improve the precision associated with estimation of the returns to schooling (for wages).

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