About
I am an assistant professor in management and strategy with a joint appointment in economics at HKU Business School. I received my BA from Harvard University in 2012 and my PhD from MIT in 2022.
I am an applied microeconomist. My interest includes labor economics, organizational economics, housing, and money and barter. I enjoy transparent data analysis, simple models, and institutional detail.
Here is my CV. You can reach me at mbwong@hku.hk or DM me on Twitter. I am hiring a pre-doctoral research assistant. Feel free to email me!
Working Papers
(with Mayara Felix)
Last Updated: April 2024
Abstract (click to expand): The rise of domestic outsourcing is documented to have reduced the wages of low-wage workers, but little is known about its effects on employment and on higher-wage occupations. This paper estimates the effects of domestic outsourcing using Brazil’s 1993 court-ordered outsourcing legalization, which sharply increased outsourcing in the large and professionalized occupation of security guards. We find that legalization led to a wave of occupational layoffs that affected 7-9% of the occupation. These layoffs temporarily reduced the employment of direct-hire incumbent guards and persistently reduced their wages, due to transitions to other occupations and lower-wage firms. By contrast, on-site outsourcing, where workers flowed to contract firms, was rare. We then estimate the effect of legalization on local labor markets, using a triple-differences design that leverages North-South variation in pre-legalization court permissiveness and compares guards to less affected occupations. We find that legalization persistently increased total guard employment by 5.2% and shifted the occupation’s demographic composition towards younger workers, while having no effect on demographic-adjusted wages. Roughly half of the employment increase was driven by workers coming from outside formality. A simple framework suggests that outsourcing legalization increased efficiency in Brazil’s security service sector, with only limited effects on worker surplus.
(with Duoxi Li)
Last Updated: March 2024
Abstract (click to expand): This paper develops a repeated-game model of an economy in which buyers may frictionlessly enter relational contracts with either producers or intermediaries. We show that centralized intermediaries emerge to allocate producers when buyers have short-lived demand and observe the performance of only their matched producers. The intermediaries monitor and reallocate producers across buyers, sustain relational contracts with either longer duration or less idleness, and thereby strengthen incentives to perform. However, an additional markup is needed for intermediaries to perform. This double marginalization leads bilateral and intermediated contracts to coexist in a unique steady-state equilibrium. The optimal choice between intermediation and bilateral contracting depends on demand volatility, gains from specialization, market tightness, and reputational effects. The model generates realistic predictions for the labor boundaries of firms. We discuss applications to supply chains, franchises, online platforms, schools, hospitals, managers, and governments.
(with Duoxi Li)
Last Updated: November 2022
Abstract (click to expand): We develop and test a model of labor market dynamics with domestic outsourcing, productivity shocks, and endogenous separations. In the model, outsourcing may reduce worker rents, smooth labor demand, or both. Depending on the relative strengths of these two effects, outsourcing has different effects on worker hazard into non-employment. We use comprehensive administrative data on security guards and cleaners from Brazil to quantify the two effects. The estimates suggest that outsourcing significantly smoothed labor demand among security guards but did not significantly reduce their rents. By contrast, outsourcing had both demand-smoothing and large rent-stripping effects on the lower-wage occupation of cleaners.
Last Updated: March 2024
Abstract (click to expand): This paper documents the rise and fall of a redeemable digital currency in a Toronto-based barter community using unique high-frequency transaction data. The observed effects of unexpected monetary events are compared with predictions from models in monetary economics. I find that a large expansion of token supply persistently increased monetized transactions without generating inflation. A subsequent reduction in redeemability did not reduce token prices or supply, but it decreased token acceptance and transactions. When redemption was fully halted, token prices still did not change and barter volume was largely unaffected, but token acceptance declined and monetized exchange dwindled. These findings are consistent only with models of money as a medium of exchange with price coordination frictions.
Last Updated: March 2024
Abstract (click to expand): This paper studies the effects of rent notches on the household composition and average incomes of Hong Kong's public housing residents. I leverage the staggered roll-out of the Tenants Purchase Scheme between 1998 and 2006, which allowed 183,700 tenants to buy permanent occupancy rights at discounted prices and thereby removed rent notches. Difference-in-difference estimates reveal that household sizes declined by 4-5 percent in the treated estates, while average households income rose by 23 percent. The average schooling of younger adults increased by one year. These results suggest that the removal of rent notches worsened the targeting of housing assistance towards low-income populations, partly due to endogenous changes in household formation.
(with Matthew Gentzkow and Allen T. Zhang)
Last Updated: March 2024
Revise and resubmit, AEJ: Micro
Abstract (click to expand): We study the role of endogenous trust in amplifying ideological bias. Agents in our model learn a sequence of states from sources whose accuracy is ex ante uncertain. Agents learn these accuracies by comparing their own reasoning about the states based on introspection or direct experience to the sources' reports. Small biases in this reasoning can cause large ideological differences in the agents' trust in information sources and their beliefs about the states, and may lead agents to become overconfident in their own reasoning. Disagreements can be similar in magnitude whether agents see only ideologically aligned sources or diverse sources.
Publications
Work in Progress
Commodity Money: Theory and Field Evidence
(with Baiyun Jing)
Digital Money Adoption and Redemption
(with Baiyun Jing, Yang You, and Yulin Zhong)
Teaching
Current: Instructor for HKU’s PMGM7004 (Global Management from Economics Perspectives) and PMGM7019 (Economics of Strategy and Organization).
Previous: TA for MIT’s Intro Micro (undergrad, 2022), Intermediate Micro (undergrad, 2018-20), Applied Econ for Managers (EMBA, 2019), Org Econ (PhD, 2018), and Industrial Organization II (PhD, 2022).
Notes
Things I learned in Grad School (the Hard Way)
Policy Writing
The Solution to Hong Kong’s Subdivided Housing Crisis
(Translated from Hong Kong Economic Journal, 2024-2-14)
Brain Drain, Brain Gain, and The Future of Hong Kong: Evidence from LinkedIn Profiles
(Hong Kong Economic Policy Green Paper, 2024-1-10, with Alan P. Kwan and Heiwai Tang)
Using Data and Algorithms to Reduce Public Housing Wait Times
(Hong Kong Economic Policy Green Paper, 2024-1-10, with Shing-Yi Wang and Maisy Wong)
What Caused Hong Kong’s Housing Crisis?
(Hong Kong Economic Policy Green Paper, 2022-9-23, Twitter thread)
In Hong Kong’s Olympic glory, a glimpse of a hopeful new future (South China Morning Post, 2021-8-4)
Liberal or conservative, Hongkongers must learn to listen to those they disagree with (South China Morning Post, 2019-9-7, with Spike Lee and Josephine Au)
香港劏房問題之出路 (香港信報, 2024-2-14)
人才得失與香港前景：領英社交資料佐證 (香港經濟政策綠皮書, 2024-1-10, 與關穎倫和鄧希煒)
利用數據和算法減低公屋輪候時間 (香港經濟政策綠皮書, 2024-1-10, 與王欣儀和黃美施)
香港房屋危機之謎 (香港經濟政策綠皮書, 2022-9-23)
預算案500億推創科 怎用得其所 (香港經濟日報, 2018-3-18)
社會面對新挑戰 須3方面調整 (香港經濟日報, 2017-9-13)
