Welcome

I am an Associate Professor in the Department of Economics at BI Norwegian Business School in Oslo, Norway. My research focuses on International Trade, Development & Growth, and Firm Dynamics.

  simon [dot] galle [at] bi [dot] no

Bluesky @simongalle.bsky.social

Curriculum Vitae Google Scholar

Research

Publications

[4] The Unequal Effects of Trade and Automation across Local Labor Markets

with Linnea Lorentzen

The Journal of International Economics (Forthcoming, 2024) 

SlidesTwitter Thread, Online Appendix, Replication Package

Substantive question: How does the China shock compare to automation of labor in its GE impact across US commuting zones? We show that the China shock has stronger distributional effects, but its impact on aggregate gains is less than a third of automation’s impact. The combined shock (automation+China) fits the data better than either of the shocks separately.

Methodological contributions: Our framework models both trade and automation as sector-specific shocks, tractably incorporates several margins of labor market adjustment, and transparently estimates the three associated labor supply elasticities using 2SLS: the reallocation elasticity, the employment elasticity, and the intensive margin elasticity.

 

[3] Slicing the Pie: Quantifying the Aggregate and Distributional Effects of Trade

The Review of Economic Studies (2023) 

with Andrés Rodríguez-Clare and Moises Yi

SlidesTwitter Thread, Online Appendix, Replication Package

Theoretical contributions: We introduce a Roy-Frechet model of worker reallocation in the benchmark multi-sector gravity model. This setup generalizes the specific-factors intuition to a setting with labor reallocation, leads to a parsimonious formula for the group-level welfare effects from trade, and nests the aggregate results in Arkolakis, Costinot and Rodriguez-Clare (2012). Like the trade elasticity, the reallocation elasticity governs the aggregate gains from trade. Moreover, it also determines the size of the distributional effects.

Empirical contributions: We structurally estimate the reallocation elasticity in a transparent 2SLS setup, leveraging the ADH findings. In the quantification, we find that the China shock increases average welfare but some groups experience losses as high as five times the average gain.

Additional results on: the inequality-adjusted gains from trade, voluntary non-employment and involuntary unemployment, and a comparison of the college premium vs. the general specific factors impact as drivers of inequality.

 

[2] Elections and Selfishness 

Electoral Studies (2021)

with Kjetil Bjorvatn, Lars Ivar Oppedal Berge, Edward Miguel, Daniel Posner, Bertil Tungodden, and Kelly Zhang  (equal authorship by Kjetil and me)

Online AppendixBI Business Review

Motivation: Elections affect the division of resources in society and are occasions for political elites to make appeals rooted in voters’ self-interest. Hence, elections may erode altruistic norms and cause people to behave more selfishly.

What we do and find: We test our intuition using Dictator Games in a lab-in-the-field experiment involving a sample of more than 1,000 individuals in Kenya and Tanzania, adopting two approaches : within-lab experimental priming, and cross-lab variation in exposure to an election campaign. Our results suggest that elections may affect social behavior in important—and previously unrecognized—ways.

 

[1] Ethnically Biased? Experimental Evidence from Kenya

Journal of the European Economic Association (2020)

with Lars Ivar Oppedal Berge, Kjetil Bjorvatn, Edward Miguel, Daniel Posner, Bertil Tungodden, and Kelly Zhang

Previous version: How Strong Are Ethnic Preferences?

Online Appendix, Replication Files,  VoxEU Column

Ethnicity has been shown to shape political, social, and economic behavior in Africa, but the underlying mechanisms remain contested. We utilize an extensive lab study in Nairobi to isolate one prominently proposed mechanism: an individual’s bias in favor of coethnics and against non-coethnics. We find very little evidence of an ethnic bias in the behavioral games, which runs against the common presumption of extensive coethnic bias among ordinary Africans.

 

Working Papers

Competition, Financial Constraints and Misallocation: Plant-level Evidence from Indian Manufacturing 

This paper studies the dual impact of increased competition on aggregate output in a setting with both oligopolistic competition and financial constraints. In the absence of financial constraints, more competition unambiguously increases output by reducing markup levels, which increases aggregate capital. However, with financial constraints, stronger competition reduces the profitability of constrained firms and thereby slows down their rate of self-financed capital growth. Extensive reduced-form evidence confirms the theoretical predictions, including evidence from the pro-competitive impact of an industrial policy reform in India. In line with the theory, this reform reduces markup levels and dispersion, and slows capital growth. The quantitative analysis demonstrates that allocative efficiency declines with competition, but this negative effect on output is initially more than offset by a higher aggregate capital level due to lower markups. However, when firms have fixed operating costs, capital growth slows down drastically with competition, which eventually reduces aggregate capital. In this setting, less access to finance implies a lower optimal degree of competition.

 

Work in progress

The Labor Market Effects of Technical Change: A Simple But General Model– with Fenella Carpena

 

The Unequal Labor Market Effects of Removing Small-Scale Industry Reservations – with Fenella Carpena and Thilo Kroeger

 

The Effect of the Colombian Ceasefire on Household Investment – with Fenella Carpena
(Draft available upon request)

 

Refereeing Activity

American Economic Journal: Macroeconomics, American Economic Review, American Economic Review: Insights, Canadian Journal of Economics, Economic Development and Cultural Change, Economic Inquiry, Econometrica, Economics Letters, Empirical Economics, European Economic Review, Journal of Development Economics, Journal of Economic Behavior and Organization, Journal of the European Economic Association, Journal of International Economics, Journal of Monetary Economics, Journal of Public Economics, Journal of Urban Economics, Review of Economic Dynamics, Review of Economic Studies, Review of Economics and Statistics, Review of Income and Wealth