Stock Market Wealth and the Real Economy: A Local Labor Market Approach

By Gabriel Chodorow-Reich, Plamen T. Nenov, and Alp Simsek

American Economic Review, May 2021

We provide evidence of the stock market consumption wealth effect by using a local labor market analysis. An increase in local stock wealth driven by aggregate stock prices increases local employment and payroll in nontradable industries and in total, wit...

Unemployment Insurance Generosity and Aggregate Employment

By Christopher Boone, Arindrajit Dube, Lucas Goodman, and Ethan Kaplan

American Economic Journal: Economic Policy, May 2021

This paper examines the impact of unemployment insurance (UI ) on aggregate employment by exploiting cross-state variation in the maximum benefit duration during the Great Recession. Comparing adjacent counties located in neighboring states, there is no s...

Migration and Labor Market Integration in Europe

[Symposium: European Union]

By David Dorn and Josef Zweimüller

Journal of Economic Perspectives, Spring 2021

The European labor market allows for the border-free mobility of workers across 31 countries that cover most of the continent's population. However, rates of migration across European countries remain considerably lower than interstate migration in the Un...

Economic Policy and Prospects in Iraq

[Symposium: Middle East]

By Christopher Foote, William Block, Keith Crane, and Simon Gray

Journal of Economic Perspectives, Summer 2004

This paper describes the Coalition Provisional Authority's attempts to stabilize and reform Iraq's economy along market lines. It argues that while security concerns remain serious, Iraq's economy has not been crippled by violence. However, sustained econ...

Why the Middle East is Economically Underdeveloped: Historical Mechanisms of Institutional Stagnation

[Symposium: Middle East]

By Timur Kuran

Journal of Economic Perspectives, Summer 2004

Although a millennium ago the Middle East was not an economic laggard, by the 18th century it exhibited clear signs of economic backwardness. The reason for this transformation is that certain components of the region's legal infrastructure stagnated as t...

Nominal Wage Adjustments during the Pandemic Recession

By John Grigsby, Erik Hurst, Ahu Yildirmaz, and Yulia Zhestkova

AEA Papers and Proceedings, May 2021

In this paper, we show that the pandemic recession has led to frequent cuts in nominal wages. Within three months in 2020, as many wage cuts had occurred as occurred throughout the Great Recession. Unlike employment declines, wage cuts were concentrated a...

Long-Term Employment Effects from Job Losses during the COVID-19 Crisis? A Comparison to the Great Recession and Its Slow Recovery

By Till von Wachter

AEA Papers and Proceedings, May 2021

This paper compares predictions for the long-term reductions in the employment-to-population (EPOP) ratio based on estimates of the overall job-loss rate and the long-term effects of job loss with the actual evolution of the EPOP ratio. It took about ten ...

Why are European Countries Diverging in their Unemployment Experience?

[Symposium: The Transformation of Europe]

By Gilles Saint-Paul

Journal of Economic Perspectives, Fall 2004

During the nineties, unemployment fell in a number of European countries while it remained high in others. This Paper discusses potential causes for that evolution in light of recent economic research, emphasizing obstacles to reform due to political cons...

News Uncertainty in Brexit United Kingdom

By Renato Faccini and Edoardo Palombo

American Economic Review: Insights, June 2021

After the Brexit referendum, the behavior of the UK economy defied widespread expectations, as it did not exhibit a V-shaped recession but a slow decline in production. We show that this pattern of propagation arises when uncertainty is about future, rath...

Ecologies of Organizations: Diversity and Identity

[Symposium: Sociology and Economics]

By Michael T. Hannan

Journal of Economic Perspectives, Winter 2005

Effects of the COVID-19 Recession on the US Labor Market: Occupation, Family, and Gender

[Symposium: COVID-19]

By Stefania Albanesi and Jiyeon Kim

Journal of Economic Perspectives, Summer 2021

The economic crisis associated with the emergence of the novel corona virus is unlike standard recessions. Demand for workers in high contact and inflexible service occupations has declined while parental supply of labor has been reduced by lack of access...

The Young, the Old, and the Government: Demographics and Fiscal Multipliers

By Henrique S. Basso and Omar Rachedi

American Economic Journal: Macroeconomics, October 2021

We document that government spending multipliers depend on the population age structure. Using the variation in military spending and birth rates across US states, we show that the local fiscal multiplier is 1.5 and increases with the population share of ...

Labor Rationing

By Emily Breza, Supreet Kaur, and Yogita Shamdasani

American Economic Review, October 2021

This paper measures excess labor supply in equilibrium. We induce hiring shocks—which employ 24 percent of the labor force in external month-long jobs—in Indian local labor markets. In peak months, wages increase instantaneously and local aggregate em...

How Sticky Wages in Existing Jobs Can Affect Hiring

By Mark Bils, Yongsung Chang, and Sun-Bin Kim

American Economic Journal: Macroeconomics, January 2022

We consider a matching model of employment with flexible wages for new hires but sticky wages within matches. Unlike most models of sticky wages, we allow effort to respond if wages are too high or too low. In the Mortensen-Pissarides model, employment is...

Collateral Shocks

By Yvan Becard and David Gauthier

American Economic Journal: Macroeconomics, January 2022

We estimate a macroeconomic model on US data where banks lend to households and businesses and simultaneously adjust lending requirements on the two types of loans. We find that the collateral shock, a change in the ability of the financial sector to rede...

Declining Worker Turnover: The Role of Short-Duration Employment Spells

By Michael J. Pries and Richard Rogerson

American Economic Journal: Macroeconomics, January 2022

Using the Quarterly Workforce Indicators database, we document that a significant amount of the decline in labor market turnover during the last two decades is accounted for by the decline in employment spells that last just one or two quarters. This phen...

The Cyclical Behavior of Unemployment and Wages under Information Frictions

By Camilo Morales-Jiménez

American Economic Journal: Macroeconomics, January 2022

I propose a new mechanism for sluggish wages based on workers' noisy information about the state of the economy. Wages do not respond immediately to a positive aggregate shock because workers do not (yet) have enough information to demand higher wages. Th...

Endogenous Separations, Wage Rigidities, and Unemployment Volatility

By Mikael Carlsson and Andreas Westermark

American Economic Journal: Macroeconomics, January 2022

We show that in microdata, as well as in a search and matching model with flexible wages for new hires, wage rigidities of incumbent workers have substantial effects on separations and unemployment volatility. Allowing for an empirically relevant degree o...

Risk Exposure and Acquisition of Macroeconomic Information

By Christopher Roth, Sonja Settele, and Johannes Wohlfart

American Economic Review: Insights, March 2022

We conduct an experiment with a representative sample from the United States to study households' demand for macroeconomic information. Respondents who learn of a higher personal exposure to unemployment risk during recessions increase their demand for an...

The 1918 Influenza Pandemic and Its Lessons for COVID-19

By Brian Beach, Karen Clay, and Martin Saavedra

Journal of Economic Literature, March 2022

This article reviews the global health and economic consequences of the 1918 influenza pandemic, with a particular focus on topics that have seen a renewed interest because of COVID-19. We begin by providing an overview of key contextual and epidemiologic...