We develop a simple model featuring search frictions and a nondegenerate labor supply decision along the extensive margin. The model is a standard version of the neoclassical growth model with indivisible labor with idiosyncratic shocks and frictions characterized by employment loss and...

Unemployment rates in countries across the world are typically positively correlated with GDP. China is an unusual outlier from the pattern, with abnormally low, and suspiciously stable, unemployment rates according to its official statistics. This paper calculates, for the first time, China's...