We combine micro and macro unemployment duration data to study the effects of the business cycle on the outflow from unemployment. We allow the cycle to affect individual exit probabilities of unemployed workers as well as the composition of the total inflow into unemployment. We estimate the...

Randomized experiments provide policy relevant treatment effects if there areno spillovers between participants and nonparticipants. We show that thisassumption is violated for a Danish activation program for unemployed workers.Using a difference-in-difference model we show that the...

Trade unions tend to reduce the dispersion of wages among their members. Skilled workers may therefore have an incentive to separate from an encompassing union and organize into a separate craft union. In this paper, we examine a theoretical model to gain insight into the determinants of the...

We argue that promoting education may be a means to reduceincome inequality. When workers of different skill levels areimperfect substitutes in production, an increase in the level ofhuman capital in the economy reduces the return to education.Hence, a given compression of after-tax incomes can...