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Lawrence Schmidt

Associate Professor of Finance

Profile

Lawrence Schmidt is an applied economist working at the intersection of finance and macro-labor. Schmidt’s research has developed new insights about the risk exposures and decision-making processes of households, institutional investors, and financial intermediaries, and in doing so has deepened our understanding of asset prices, financial policy, and the workings of the real economy. His research to date involves two interrelated strands. The first and most active strand studies fundamental risk factors impacting the value of human capital and the causes and consequences of imperfect risk-sharing in labor and financial markets. The second strand aims to understand the underlying drivers of financial markets by focusing on the interplay between individual decision-making, strategic complementarities, and information processing frictions.

Schmidt’s research tackles these questions by a combination of quantitative models and empirical work. This work leverages, and often creates, novel microeconomic datasets, advanced econometric methods, and cutting-edge tools for textual analysis. He specializes in working large, administrative datasets capturing detailed, longitudinal information on millions of firms and workers. His work often features quantitative models that help make sense of the data and better understand financial market dynamics, evaluate welfare, and inform better economic policy.

His research has appeared in the American Economic Review, the Journal of Finance, the Journal of Financial Economics, the Review of Financial Studies, among other outlets, and his research has won multiple awards, including the 2015 AQR Top Finance Graduate Award and the 2024 Dimensional Fund Advisors First Prize Award for the best capital markets paper in the Journal of Finance. Schmidt is a Faculty Research Fellow at the National Bureau of Economic Research and holds a BA from the University of California, Santa Barbara as well as PhD and MA degrees in Economics from the University of California, San Diego. Prior to joining the faculty at UCSD, Schmidt was the Victor J Menezes (1972) Career Development Associate Professor of Finance at the MIT Sloan School of Management and an Assistant Professor in the Kenneth C. Griffin Department of Economics at the University of Chicago.


Publications

Articles Published or Accepted

"Who Benefits from Retirement Savings Incentives in the U.S.? Evidence for Gaps in Retirement Wealth Accumulation by Race and Parental Income" (with Taha Choukhmane, Jorge Colmenares, Cormac O'Dea, and Jonathan Rothbaum), Accepted at the American Economic Review, 2025.

"Time-Varying Risk Premia and Heterogeneous Labor Market Dynamics" (with Maarten Meeuwis, Dimitris Papanikolaou, and Jon Rothbaum), Accepted at the American Economic Review, 2025.

"Changing Income Risk across the US Skill Distribution: Evidence from a Generalized Kalman Filter" (with Carter Braxton, Kyle Herkenhoff, and Jonathan Rothbaum), American Economic Review, December 2025.

"Technology and Labor Markets: Past, Present, and Future; Evidence from Two Centuries of Innovation" (with Huben Liu, Dimitris Papanikolaou, and Bryan Seegmiller), Forthcoming in the Brookings Papers on Economic Activity, Fall 2025.

"Climbing and Falling Off the Ladder: Asset Pricing Implications of Labor Market Event Risk," Journal of Financial Economics, October 2025.

"Selling Fast and Buying Slow: Heuristics and Trading Performance of Institutional Investors" (with Klakow Akepanidtaworn, Rick Di Mascio, and Alex Imas), Journal of Finance, December 2023.

"Pockets of Predictability" (with Leland Farmer and Allan Timmermann), Journal of Finance, April 2023.

"Robust Comparative Statics for the Elasticity of Intertemporal Substitution" (with Joel Flynn and Alexis Toda), Theoretical Economics, January 2023.

"Measuring Document Similarity with Weighted Averages of Word Vectors" (with Dimitris Papanikolaou and Bryan Seegmiller), Explorations in Economic History, January 2023.

"Working Remotely and the Supply Side Impact of COVID-19" (with Dimitris Papanikolaou), Review of Asset Pricing Studies, December 2021.

"Investor Information Acquisition and Money Market Fund Risk Rebalancing During the 2011-2012 Eurozone Crisis" (with Emily Gallagher, Allan Timmermann, and Russell Wermers), Review of Financial Studies, April 2020.

"Runs on Money Market Mutual Funds" (with Allan Timmermann and Russell Wermers), American Economic Review, September 2016.

"An Empirical Test of Pricing Kernel Monotonicity" (with Brendan Beare), Journal of Applied Econometrics, March 2016.

"On the Dimensionality of Bounds Generated by the Shapley Folkman Theorem," Journal of Mathematical Economics, January 2012.

Working Papers

"Artificial Intelligence and the Labor Market" (with Menaka Hampole, Dimitris Papanikolaou, and Bryan Seegmiller), 2025. Revision requested at Quarterly Journal of Economics.

"Technology and Labor Displacement: Evidence from Linking Patents with Worker-level Data" (with Leonid Kogan, Dimitris Papanikolaou, and Bryan Seegmiller), 2024. Revision requested at Review of Economic Studies.

"Winners and Losers: Competition, Creative Destruction, and Labor Income Risk" (with Brice Green, Leonid Kogan, and Dimitris Papanikolaou), 2026.

"Time-Varying Risk Premia, Firm Insurance, and Endogenous Labor Income Risk" (with Maarten Meeuwis and Dimitris Papanikolaou), 2026.

"A Tale of Two Market Returns: The Broad Market Factor and The Idiosyncratic Financial Factor" (with Sung Je Byun and Johnathan Loudis), 2025. Revision requested at Journal of Financial Economics.

"How Do Health Insurance Costs Affect Low- and High-Income Workers?" (with Janet Gao, Shan Ge, and Cristina Tello-Trillo), 2025. Revision requested at Review of Financial Studies.

"Rising Risk Among the Rich: Implications for Wealth Inequality and Interest Rates" (with J. Carter Braxton, Kyle Herkenhoff, Michael Nattinger, and Jonathan Rothbaum), 2026.

"Surveying Counterfactuals: Improving 401(k) Matches Using Hypothetical Choices" (with Guillermo Carranza, Taha Choukhmane, Fiona Greig, and Cormac O'Dea), 2026.

"Quantile Spacings: An Interpretable and Scalable Approach to Distributional Modeling" (with Yinchu Zhu), 2025. Winner of Walter P. Heller Memorial Award.

"National Experimental Wellbeing Statistics" (with Adam Bee, Joshua Mitchell, Nikolas Mittag, Jonathan Rothbaum, Carl Sanders, and Matthew Unrath), 2023.

"Nondiversifiable risk, self-insurance, and asset demand at the top of the wealth distribution" (with Magne Mogstad, Mariel Schwartz, Maria Tiurina, Nick Von Turkovich, and Ola Vestad). In Preparation.

Research Areas


  • Asset Pricing
  • Labor Economics & Human Capital
  • Household Finance
  • Financial Intermediation
  • Technology, AI & Labor Markets
  • Financial Market Microstructure / Decision-Making Frictions
  • Applied Econometrics & Textual Analysis
  • Consulting (industry experience)