The power of Papal persuasion

[Research Highlight]

November 02, 2017

How much did Pope John Paul II influence the beliefs and actions of Catholics?

Back to work

[Research Highlight]

November 27, 2017

The U.S. labor market is not as flexible as once thought.

Policy Watch: The Federal Employees Health Benefits Plan

By Roger Feldman, Kenneth E. Thorpe, and Bradley Gray

Journal of Economic Perspectives, Spring 2002

This short feature describes the Federal Employees Health Benefits Plan (FEHBP), which provides health insurance benefits to active and retired federal employees and their dependents. The article discusses the FEHBP as a touchstone for research on employm...

The NAIRU in Theory and Practice

By Laurence Ball and N. Gregory Mankiw

Journal of Economic Perspectives, Fall 2002

This paper discusses the NAIRU--the non-accelerating inflation rate of unemployment. It first considers the role of the NAIRU concept in business cycle theory, arguing that this concept is implicit in any model in which monetary policy influences both inf...

Oligopsony and Monopsonistic Competition in Labor Markets

By V. Bhaskar, Alan Manning, and Ted To

Journal of Economic Perspectives, Spring 2002

We argue that models of oligopsony or monopsonistic competition provide insights and explanation for many empirical phenomena in labor markets. Using a simple model with job differentiation and preference heterogeneity, we illustrate how such models can b...

Inequality in the Labor Market for Native American Women and the Great Recession

By Jeffrey D. Burnette

American Economic Review, May 2017

This research paper builds on previous literature and documents general changes in the labor market for Native American women that occurred during the Great Recession using extracts of data from the Current Population Survey Annual Earnings file, known as...

Resolving the Global Imbalance: The Dollar and the U.S. Saving Rate

[Symposium: U.S. Trade Deficit]

By Martin Feldstein

Journal of Economic Perspectives, Summer 2008

The massive deficit in the U.S. trade and current accounts is one of the most striking features of the current global economy and, to some observers, one of the most worrying. Although the current account deficit finally began to shrink in 2007, it remain...

Employment Fluctuations with Equilibrium Wage Stickiness

By Robert E. Hall

American Economic Review, March 2005

Following a recession, the aggregate labor market is slack–employment remains below normal and recruiting efforts of employers, as measured by help-wanted advertising and vacancies, are low. A model of matching friction explains the qualitative response...

Assessing the Welfare Effects of Unemployment Benefits Using the Regression Kink Design

By Camille Landais

American Economic Journal: Economic Policy, November 2015

I show how, in the tradition of the dynamic labor supply literature, one can identify the moral hazard effects and liquidity effects of unemployment insurance (UI) using variations along the time profile of unemployment benefits. I use this strategy to in...

Heterogeneous Scarring Effects of Full-Year Nonemployment

By Fatih Guvenen, Fatih Karahan, Serdar Ozkan, and Jae Song

American Economic Review, May 2017

Drawing on administrative data from the Social Security Administration, we find that individuals that go through a long period of non-employment suffer large and long-term earnings losses (around 35-40 percent) compared to individuals with similar age and...

Micro-to-Macro Simulation: A Primer with a Labor Market Example

By Barbara R. Bergmann

Journal of Economic Perspectives, Winter 1990

Simulation models, now widely used in the physical sciences, can also help economists in depicting the actions and interactions of individuals and firms through time. This article provides an introduction to microsimulation: how it works, how to do it, it...

Technology, Employment, and the Business Cycle: Do Technology Shocks Explain Aggregate Fluctuations?

By Jordi Galí

American Economic Review, March 1999

The author estimate a decomposition of productivity and hours into technology and nontechnology components. Two results stand out: (1) the estimated conditional correlations of hours and productivity are negative for technology shocks, positive for nontec...

A Search and Matching Approach to Labor Markets: Did the Natural Rate of Unemployment Rise?

[Symposium: Labor Markets and Unemployment]

By Mary C. Daly, Bart Hobijn, Ayşegül Şahin, and Robert G. Valletta

Journal of Economic Perspectives, Summer 2012

The U.S. unemployment rate has remained stubbornly high since the 2007-2009 recession, leading some observers to conclude that structural rather than cyclical factors are to blame. Relying on a standard job search and matching framework and empirical evid...

Corruption Dynamics: The Golden Goose Effect

By Paul Niehaus and Sandip Sukhtankar

American Economic Journal: Economic Policy, November 2013

Theoretical work on disciplining corrupt agents has emphasized the role of expected future rents -- for example, efficiency wages. Yet taken seriously this approach implies that illicit future rents should also deter corruption. We study this "golden g...

Internet Job Search and Unemployment Durations

By Peter Kuhn and Mikal Skuterud

American Economic Review, March 2004

Using the December 1998 and August 2000 CPS Computer and Internet Supplements matched with subsequent CPS files, we ask which types of unemployed workers looked for work on line and whether Internet searchers became reemployed more quickly. In our data, I...

The Growth Potential of Startups over the Business Cycle

By Petr Sedláček and Vincent Sterk

American Economic Review, October 2017

This paper shows that employment in cohorts of US firms is strongly influenced by aggregate conditions at the time of their entry. Employment fluctuations of startups are procyclical, they persist into later years, and cohort-level employment variations a...

Investment Dispersion and the Business Cycle

By Rüdiger Bachmann and Christian Bayer

American Economic Review, April 2014

The cross-sectional dispersion of firm-level investment rates is procyclical. This makes investment rates different from productivity, output, and employment growth, which have countercyclical dispersions. A calibrated heterogeneous-firm business cycle...

Consumption and Income Inequality and the Great Recession

By Bruce D. Meyer and James X. Sullivan

American Economic Review, May 2013

We examine changes in consumption and income inequality between 2000 and 2011. During the most recent recession, unemployment rose and asset values declined sharply. We investigate how the recession affected inequality while addressing concerns about unde...

The Limited Influence of Unemployment on the Wage Bargain

By Robert E. Hall and Paul R. Milgrom

American Economic Review, September 2008

When a job-seeker and an employer meet, find a prospective joint surplus, and bargain over the wage, conditions in the outside labor market, including especially unemployment, may have limited influence. The job-seeker's only credible threat during bargai...

The Cyclical Behavior of Equilibrium Unemployment and Vacancies Revisited

By Marcus Hagedorn and Iourii Manovskii

American Economic Review, September 2008

Recently, a number of authors have argued that the standard search model cannot generate the observed business-cycle-frequency fluctuations in unemployment and job vacancies, given shocks of a plausible magnitude. We propose a new calibration strategy of ...