We develop a theoretical model with labor market frictions, incomplete financial markets and with households which have two members. Households face unemployment risks but their members adjust their labor supplies to insure against unemployment. We use the model to explain the cyclical...

This paper analyzes how subjective expectations about wage opportunities influence the job search decision. We match data on subjective wage expectations with administrative employment records. The data reveal that unemployed individuals over-estimate their future net re-employment wage by 10%...

Academic education is generally rewarded by employers, but what happens to graduates if they are trained for two years less and have to compete with vocationally trained labor market entrants in a similar field of study? Focusing on Germany, we analyze labor market entries of individuals...

This paper studies the effects of the high-speed internet expansion on the match quality of new hires. They combine data on internet availability at the local level with German individual register and vacancy data. Results show that internet availability has no major impact on the stability of...