Edoardo Maria Acabbi


Academic positions

Assistant Professor, Universidad Carlos III de Madrid (Sept. 2020 - )
Associate Faculty, CEMFI (Sept. 2024 - )
Visiting Scholar, Northwestern University (Fall 2022, Fall 2023, Fall 2024)


Ph.D. in Business Economics, Harvard University (Sept. 2014 - May 2020)
M.Sc. in Economics and Social Sciences, Bocconi University (Sept. 2010 - April 2013)
B.A. in International Economics and Management, Bocconi University (Sept. 2007 - Oct. 2010)


Bertheau, Antoine, Acabbi, Edoardo M., Barcelo, Cristina , Gulyas, Andreas , Lombardi, Stefano , and Saggio, Raffaele
The Unequal Consequences of Job Loss across Countries.
2023, American Economic Review: Insights, Vol. 5, No. 3, pages 393-408
NBER working paper version
Media Coverage: VoxEu.org, World Economic Forum and The Conversation Global in English, LaVoce.info in Italian, The Conversation España in Spanish, Portuguese Economy Research Report in English.

Abstract. We document the consequences of losing a job across countries using a harmonized research design applied to seven matched employer-employee datasets. Workers in Denmark and Sweden experience the lowest earnings declines following job displacement, while workers in Italy, Spain, and Portugal experience losses three times as high. French and Austrian workers face earnings losses somewhere in between. Key to these differences is that southern European workers are less likely to find employment following displacement. Loss of employer-specific wage premiums explains a substantial portion of wage losses in all countries.

Working Papers

Acabbi, Edoardo M., Alati, Andrea and Mazzone, Luca (2024).
Human Capital Ladders, Cyclical Sorting, and Hysteresis.
Part of the VisitInps project.
NEW VERSION! (April 2024)

Abstract. Using administrative data, we document that workers acquire more human capital at more productive firms. Recessions distort workers-firm sorting, flatten the job ladder and impact human capital accumulation, as workers match on average to worse firms. To quantify the aggregate relevance of these effects, we build a directed search model with aggregate risk and worker-firm heterogeneity, in which human capital accumulation depends on firm quality. We estimate the model and show that recessions have persistent negative effects on the productivity of worker-firm matches, with distortions in sorting and human capital accumulation accounting for approximately 30% of cumulative output losses.

Acabbi, Edoardo M., Panetti, Ettore and Sforza, Alessandro (2023).
The Financial Channels of Labor Rigidities: Evidence from Portugal. Online appendix Additional material
Best paper on “Savings and Financing of the Portuguese Economy”, Office of Strategy and Studies (GEE) of the Portuguese Ministry of Economy and the Portuguese Association of Insurers (APS)
Blog post about the paper (courtesy of Thorsten Beck)
Media coverage: Portuguese Economy Research Report in English.
NEW VERSION! (April 2024)

Abstract. We study how labor rigidities affect firms' responses to liquidity shocks. Using administrative data on workers, firms and banks in Portugal, we establish two key results. First, we show that the negative effects on employment and firm survival of an unexpected liquidity shock through a contraction in short-term credit are concentrated in firms deriving greater value added from labor. These firms tend to feature a higher-skill, less replaceable workforce, requiring greater investment in on-the-job training. Second, firm productivity does not mitigate the impact of liquidity shocks. Our findings suggest that labor rigidity impedes productivity-enhancing reallocation during financial crises.

Sforza, Alessandro and Acabbi, Edoardo M. (2024).
Credit and Firms’ Organization
NEW VERSION! (April 2024)

Abstract. We investigate how credit availability affects the organization of firms’ labor. We construct an instrument for firm’s credit supply based on firm-bank credit linkages and conduct an event study on the decision to reorganize the labor force using data on Portuguese firms, workers and banks. We show that the reorganization of the firms’ labor structure is connected to the financing of machines and equipment: firms that invested in machines and equipment are more exposed to credit shortages and reorganize by reducing employment of production workers and specialized workers that are complementary with machines. These findings shed light on how credit dynamics shape labor decisions within firms, providing valuable insights into their behavior in response to financial limitations.

Acabbi, Edoardo M. and Alati, Andrea (2021).
Defusing Leverage: Liquidity Management and Labor Contracts.
Part of the VistInps project. Old draft, new version coming soon!

Abstract. Rigidities in firms' payroll adjustment amplify the impact of aggregate fluctuations on fundamentals. We analyze how firms use flexible contracts to decrease this pass-through. Leveraging unique Italian administrative data, we show that firms’ adoption of temporary contracts contributes to a reduction in their variability of cash flows and profits, particularly when their initial labor share is high. We then provide a causal identification of the effect for firms fundamental of a reform liberalizing the use of temporary contracts in 2001. We find that the liberalization of temporary contracts increased their adoption and led to a decline in average labor compensation. The reform translates into a substantial rise in profit margins and a reduction in the cross-sectional standard deviation of profits, but only among firms characterized by initially more rigid labor costs.

Other writings

Molti elogi, ma la riforma del lavoro spagnola ha tanti limiti , with Silvia Vannutelli, June 3rd 2023, article for Il Foglio

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