Hiring, Churn, and the Business Cycle

By Edward P. Lazear and James R. Spletzer

American Economic Review, May 2012

Hires occur for two reasons - to grow a business and to replace those who have left (churn). Churn is an important part of employment dynamics, allowing workers to move to their most productive use. We present evidence on churn from the Job Openings and L...

What Hides Behind an Unemployment Rate: Comparing Portuguese and U.S. Labor Markets

By Olivier Blanchard and Pedro Portugal

American Economic Review, March 2001

Behind similar unemployment rates in the United States and Portugal hide two very different labor markets. Unemployment duration is three times longer in Portugal than in the United States. Symmetrically, flows of workers into unemployment are three times...

Unemployment in the Great Recession: Did the Housing Market Crisis Prevent the Unemployed from Moving to Take Jobs?

By Henry S. Farber

American Economic Review, May 2012

The labor market in the Great Recession and its aftermath is characterized by great difficulty in escaping unemployment. I present two empirical analyses of a particular explanation for that difficulty, that the housing market crisis has prevented the une...

A Theory of Demand Shocks

By Guido Lorenzoni

American Economic Review, December 2009

This paper presents a model of business cycles driven by shocks to consumer expectations regarding aggregate productivity. Agents are hit by heterogeneous productivity shocks, they observe their own productivity and a noisy public signal regarding aggr...

Wage Posting and Business Cycles

By Giuseppe Moscarini and Fabien Postel-Vinay

American Economic Review, May 2016

The canonical model of job search and wage posting (Burdett and Mortensen, 1998) establishes a natural connection between the average wage growth in the economy and the pace of Employer-to-Employer (EE) transitions, predicting wage growth to be positively...

Endogenous Inequality in Integrated Labor Markets with Two-Sided Search

By George J. Mailath, Larry Samuelson, and Avner Shaked

American Economic Review, March 2000

We consider a market with "red" and "green" workers, where labels are payoff irrelevant. Workers may acquire skills. Skilled workers search for vacancies, while firms search for workers. A unique symmetric equilibrium exists in which color is irrelevant. ...

Labor Market Effects of Social Programs: Evidence from India's Employment Guarantee

By Clément Imbert and John Papp

American Economic Journal: Applied Economics, April 2015

We estimate the effect of a large rural workfare program in India on private employment and wages by comparing trends in districts that received the program earlier relative to those that received it later. Our results suggest that public sector hiring cr...

Multinationals and Anti-sweatshop Activism

By Ann Harrison and Jason Scorse

American Economic Review, March 2010

During the 1990s, anti-sweatshop activists campaigned to improve conditions for workers in developing countries. This paper analyzes the impact of anti-sweatshop campaigns in Indonesia on wages and employment. Identification is based on comparing the w...

Mismatch Unemployment

By Ayşegül Şahin, Joseph Song, Giorgio Topa, and Giovanni L. Violante

American Economic Review, November 2014

We develop a framework where mismatch between vacancies and job seekers across sectors translates into higher unemployment by lowering the aggregate job-finding rate. We use this framework to measure the contribution of mismatch to the recent rise in U.S....

Job-to-Job Flows and Earnings Growth

By Joyce K. Hahn, Henry R. Hyatt, Hubert P. Janicki, and Stephen R. Tibbets

American Economic Review, May 2017

The US workforce has had little change in real wages, income, or earnings since the year 2000. However, even when there is little change in the average rate at which workers are compensated, individual workers experienced a distribution of wage and earnin...

Is Modern Technology Responsible for Jobless Recoveries?

By Georg Graetz and Guy Michaels

American Economic Review, May 2017

Since the early 1990s, recoveries from recessions in the US have been plagued by weak employment growth. We investigate whether a similar problem afflicts other developed economies, and whether technology is a culprit. We study recoveries from 71 recessio...

Inflation and Unemployment in the Long Run

By Aleksander Berentsen, Guido Menzio, and Randall Wright

American Economic Review, February 2011

We study the long-run relation between money (inflation or interest rates) and unemployment. We document positive relationships between these variables at low frequencies. We develop a framework where money and unemployment are modeled using explicit micr...

What Can Economists Learn from Happiness Research?

By Bruno S. Frey and Alois Stutzer

Journal of Economic Literature, June 2002

In recent years, there has been a steadily increasing interest on the part of economists in happiness research. We argue that reported subjective well-being is a satisfactory empirical approximation to individual utility and that happiness research is abl...

Policy Watch: U.S. Disability Policy in a Changing Environment

By Richard V. Burkhauser and Mary C. Daly

Journal of Economic Perspectives, Winter 2002

In this paper we provide a context for evaluating the goals and effectiveness of current disability policy. We review the Social Security Disability Insurance and Supplemental Security Income programs and examine trends in disability benefit receipt and e...

Fiscal Policy, Profits, and Investment

By Alberto Alesina, Silvia Ardagna, Roberto Perotti, and Fabio Schiantarelli

American Economic Review, June 2002

This paper evaluates the effects of fiscal policy on investment using a panel of OECD countries. We find a sizeable negative effect of public spending—and in particular of its wage component—on profits and on business investment. This result is consis...

The Price of Political Opposition: Evidence from Venezuela's Maisanta

By Chang-Tai Hsieh, Edward Miguel, Daniel Ortega, and Francisco Rodriguez

American Economic Journal: Applied Economics, April 2011

In 2004, the Hugo Chávez regime in Venezuela distributed the list of several million voters who had attempted to remove him from office throughout the government bureaucracy, allegedly to identify and punish these voters. We match the list of pet...

The Growth of Low-Skill Service Jobs and the Polarization of the US Labor Market

By David H. Autor and David Dorn

American Economic Review, August 2013

We offer a unified analysis of the growth of low-skill service occupations between 1980 and 2005 and the concurrent polarization of US employment and wages. We hypothesize that polarization stems from the interaction between consumer preferences, which...

Are Government Spending Multipliers Greater during Periods of Slack? Evidence from Twentieth-Century Historical Data

By Michael T. Owyang, Valerie A. Ramey, and Sarah Zubairy

American Economic Review, May 2013

A key question that has arisen during recent debates is whether government spending multipliers are larger during times when resources are idle. This paper seeks to shed light on this question by analyzing new quarterly historical data covering multiple l...

Recruiting Intensity during and after the Great Recession: National and Industry Evidence

By Steven J. Davis, R. Jason Faberman, and John C. Haltiwanger

American Economic Review, May 2012

We measure job-filling rates and recruiting intensity per vacancy at the national and industry levels from January 2001 to September 2011 using data from the Job Openings and Labor Turnover Survey. Industry-level movements in these variables are at odds w...

Trends in Employment and Earnings of Allowed and Rejected Applicants to the Social Security Disability Insurance Program

By Till von Wachter, Jae Song, and Joyce Manchester

American Economic Review, December 2011

Longitudinal administrative data show that rejected male applicants to the Disability Insurance (DI) program who are younger or have low-mortality impairments such as back pain and mental health problems exhibit substantial labor force attachment. While w...