In many economies, there is substantial economic activity in the informal sector, beyond the reach of government policy. Labor market policies, which by definition apply only to the formal sector, can have important spillover effects on the informal sector. The relative sizes of the informal and...

We show that in a search/matching model with endogenous participation in which workers are heterogeneous with respect to market productivity, satisfying the Hosios rule leads to excessive vacancy creation. The reason is that the marginal worker does not internalize the effect of his or her...

The Swedish adult education program known as the Knowledge Lift (1997-2002) was unprecedented in its size and scope, aiming to raise the skill level of large numbers of low-skill workers. This paper evaluates the potential effects of this program on aggregate labor market outcomes. This is done...

In this paper, we present a directed search model of the housing market. The pricing mechanism we analyze reflects the way houses are bought and sold in the United States. Our model is consistent with the observation that houses are sometimes sold above, sometimes below and sometimes at the...

We consider the problem of sequential search when the decision to stop searching is made by a committee. We show that a symmetric stationary equilibrium exists and is unique given that the distribution of rewards is log concave. Committee members set a lower acceptance threshold than do...

Derek Neal (JPE 2004) used the NLSY79 to show that the observed median log wage gap between young white and young black women in 1990 underestimated the true, selection-corrected gap, i.e., the gap we would have expected to see had all of these women been employed in 1990. In this paper, we use...

In this paper, we use quantile regression decomposition methods to analyze the gender gap between men and women who work full time in the Netherlands. Because the fraction of women working full time in the Netherlands is quite low, sample selection is a serious issue. In addition to shedding...

The Swedish adult education program known as the Knowledge Lift is unprecedented in its size and scope, aiming to raise the skill level of all low-skilled workers towards the medium level. This paper evaluates the effects of program participation on individual labor market outcomes, notably...

The literature offers two foundations for competitive search equilibrium, a Nash approach and a market-maker approach. When each buyer visits only one seller (or each worker makes only one job application), the two approaches are equivalent. However, when each buyer visits multiple sellers, this...