Seemingly short-term labor market shocks, such as job displacements, can have persistent effects on workers’ earnings, employment, job stability, consumption, and access to health insurance. A long literature suggests such changes in workers’ socioeconomic conditions can have potentially...

In this paper I evaluate to what extent a real business cycle (RBC) model that incorporates search and leisure decisions can simultaneously account for the observed behavior of employment, unemployment and out-of-the-labor-force. This contrasts with the previous RBC literature, which analyzed...

This paper proposes a methodology for estimating job search models that does not require either functional form assumptions or ruling out the presence of unobserved variation in worker ability. In particular, building on existing results from record- value theory, a branch of statistics that...

This paper extends Hopenhayn and Rogerson's analysis of firing taxes by introducing a flexible form of capital and considering transitionary dynamics. The paper finds that capital is not important for understanding the long run and welfare effects of firing taxes. However, capital is crucial for...

There are significant differences in the dynamics of employment over the business cycle between young and old manufacturing plants. Young plants are more sensitive to aggregate disturbances, and they respond to them along different margins. We interpret these differences as reflecting greater...