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...

2021 in Research Highlights

[Research Highlight]

December 14, 2021

Economists addressed the recovery of Southern wealth after the Civil War, why the United States has the best research universities, Facebook filters, and more.

Removing Welfare Traps: Employment Responses in the Finnish Basic Income Experiment

By Jouko Verho, Kari Hämäläinen, and Ohto Kanninen

American Economic Journal: Economic Policy, February 2022

This paper provides evidence that replacing minimum unemployment benefits with a basic income of equal size has minor employment effects at best. We examine an experiment in Finland in which 2,000 benefit recipients were randomized to receive a monthly ba...

Labor Productivity Growth and Industrialization in Africa

[Symposium: Economies of Africa]

By Margaret McMillan and Albert Zeufack

Journal of Economic Perspectives, Winter 2022

Manufacturing has made an important contribution to raising living standards in many parts of the world. Concerns about premature deindustrialization have made some observers skeptical about the potential for manufacturing to play this role in Africa. B...

Young Adults and Labor Markets in Africa

[Symposium: Economies of Africa]

By Oriana Bandiera, Ahmed Elsayed, Andrea Smurra, and Céline Zipfel

Journal of Economic Perspectives, Winter 2022

Every year, millions of young adults join the labor market in Africa. This paper harmonizes surveys and censuses from 68 low- and middle-income countries to compare their job prospects to those of their counterparts in other low-income regions. We show th...

Quarters vs. semesters

[Research Highlight]

February 09, 2022

How does switching to a different academic calendar impact students?

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...

Designing Deadlines

By Erik Madsen

American Economic Review, March 2022

I study how an organization should manage a project of uncertain scope, when it is advised by a privately informed expert who prefers to prolong his employment. The optimal long-term contract combines a deadline for project completion and incentive paymen...

Basic income and welfare traps

[Page]

Can replacing unemployment benefits with a basic income boost employment?

Looking Back at 50 Years of the Clean Air Act

By Joseph E. Aldy, Maximilian Auffhammer, Maureen Cropper, Arthur Fraas, and Richard Morgenstern

Journal of Economic Literature, March 2022

We synthesize and review retrospective analyses of federal air quality regulations to examine the contributions of the Clean Air Act (CAA) to the vast air quality improvements seen since 1970. Geographic heterogeneity in stringency affects emissions, publ...

The increasing quality of job matching

[Research Highlight]

March 03, 2022

Better job screening is decreasing the rate of worker turnover.

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...

LinkedIn(to) Job Opportunities: Experimental Evidence from Job Readiness Training

By Laurel Wheeler, Robert Garlick, Eric Johnson, Patrick Shaw, and Marissa Gargano

American Economic Journal: Applied Economics, April 2022

Online professional networking platforms are widely used and may help workers to search for and obtain jobs. We run the first randomized evaluation of training work seekers to join and use one of the largest platforms, LinkedIn. Training increases the end...

Missing Women, Integration Costs, and Big Push Policies in the Saudi Labor Market

By Conrad Miller, Jennifer Peck, and Mehmet Seflek

American Economic Journal: Applied Economics, April 2022

In settings where social norms promote gender segregation, firms may find it costly to employ both men and women. These integration costs may hinder women's employment. We develop a methodology to test for the presence of fixed integration costs and estim...

Unemployment Insurance as a Worker Indiscipline Device? Evidence from Scanner Data

By Lester Lusher, Geoffrey C. Schnorr, and Rebecca L.C. Taylor

American Economic Journal: Applied Economics, April 2022

We provide causal evidence of an ex ante moral hazard effect of unemployment insurance (UI) by matching plausibly exogenous changes in UI benefit duration across state-weeks during the Great Recession to high-frequency productivity measures from individua...

Understanding the Scarring Effect of Recessions

By Christopher Huckfeldt

American Economic Review, April 2022

This paper documents that the earnings cost of job loss is concentrated among workers who find reemployment in lower-skill occupations, and that the cost and incidence of such occupation displacement is higher for workers who lose their job during a reces...

Labor Market Power

By David Berger, Kyle Herkenhoff, and Simon Mongey

American Economic Review, April 2022

We develop, estimate, and test a tractable general equilibrium model of oligopsony with differentiated jobs and concentrated labor markets. We estimate key model parameters by matching new evidence on the relationship between firms' local labor market sha...

Measuring Geopolitical Risk

By Dario Caldara and Matteo Iacoviello

American Economic Review, April 2022

We present a news-based measure of adverse geopolitical events and associated risks. The geopolitical risk (GPR) index spikes around the two world wars, at the beginning of the Korean War, during the Cuban Missile Crisis, and after 9/11. Higher geopolitic...

Pigouvian Cycles

By Renato Faccini and Leonardo Melosi

American Economic Journal: Macroeconomics, April 2022

Current and expected unemployment rates contain information that is highly useful to estimate the effect of news about TFP and to allow a general equilibrium rational expectations model to generate Pigouvian cycles: a large fraction of the comovement of o...

Supply and Demand in Disaggregated Keynesian Economies with an Application to the COVID-19 Crisis

By David Baqaee and Emmanuel Farhi

American Economic Review, May 2022

We study supply and demand shocks in a disaggregated model with multiple sectors, multiple factors, input-output linkages, downward nominal wage rigidities, credit-constraints, and a zero lower bound. We use the model to understand how the COVID-19 cris...