response of unemployment in our incentive pay model calibrated to strongly procyclical wages. …We introduce dynamic incentive contracts into a model of inflation and unemployment dynamics. Our main result is that … wage cyclicality from incentives neither affects the slope of the Phillips curve for prices nor dampens unemployment …

risk of unemployment two years after the treatment. However, the effects are heterogeneous as to gender, age, education …

We derive a sufficient statistics optimal income tax formula in a general model that incorporates unemployment and … endogenous wages, to study the shape of the tax and transfer system at the bottom of the income distribution. The sufficient … resembles a Negative Income Tax than an Earned Income Tax Credit relative to the case where unemployment and wage responses are …