Labor productivity is more procyclical in OECD countries with lower employment volatility. To capture this new stylized fact, we propose a business cycle model with employment adjustment costs, variable hours and labor effort. We show that, in our model with variable effort, greater labor market...

Working from home (WfH) has become much more common since the early 2000s. We exploit the German Socio-Economic Panel between 1997 and 2014 to investigate how such a work arrangement affects labour market outcomes and life satisfaction. We find that childless employees work an extra hour per...