Essays on the Productivity Externalities of Remote Work and the Effects of Globalization on Executive Compensation

<p dir="ltr">This dissertation includes two chapters on the labor market: one on productivity spillovers related to remote work and the other on globalization's effects on executive pay. Both combine theoretical modeling and empirical analysis. Chapter 1 uses a quantitative model for structural estimation, optimal work arrangement allocation, policy simulation, and counterfactuals. Chapter 2 develops a conceptual model to identify causal mechanisms and tests its predictions with reduced-form methods.</p><p dir="ltr">The first chapter studies the socially optimal mix of onsite work and remote work. I develop a spatial general equilibrium model in which workers decide how much to work onsite and work from home. Productivity spillovers can occur within and between onsite and remote workers. The model predicts that the balance of productivity spillover effects between onsite and remote work influences the gap between the socially optimal and the market equilibrium level of onsite work. I measure these spillovers by matching the model to U.S. survey data from 2022 to 2024 at the city-sector-work mode level. The quantitative results show that, on average, the social optimum favors slightly more onsite work compared to individual choices. The remote productivity spillover brings the economy closer to the social optimum and saves the costs of achieving the socially optimal allocation. Additionally, there are variations in optimal work arrangement allocation across cities and sectors.</p><p dir="ltr">The second chapter is a joint work with Prof. David Hummels and Prof. Jakob R. Munch. We build a model of CEO compensation that unites principal-agent and assignment models in the face of trade shocks that interact with CEO effort to change the value of the firm. The model predicts that globalization changes CEO compensation through scale, volatility, and ability-magnification channels. Using Danish matched worker-firm data, we find empirical results supporting these channels: (1) Exporting and offshoring increase the level of CEO compensation by increasing firm size and volatility; (2) Increasing volatility of shocks that interact with CEO effort increases the share of firm value paid to CEOs; (3) Higher-ability CEOs generate greater sales increases in response to exogenous demand shocks.</p>