higher wages. This increases firms' incentives to post more vacancies, which makes unemployment volatile and sensitive to … aggregate shocks. The model is robust to two major criticisms of existing theories of sluggish wages and volatile unemployment … explains 70% of unemployment volatility …

This paper provides quasi-experimental estimates of the causal effect of long-term unemployment on wages. Using … standard job search theory, the paper derives and tests conditions on reemployment wages under which Unemployment Insurance (UI …) extensions can be used as instrumental variables (IV) for unemployment duration. Using a regression discontinuity design, the …

welfare. This insight leads to a novel test for the optimality of unemployment insurance based on the responsiveness of … reservation wages to unemployment benefits. Some existing estimates imply significant gains to raising the current level of … unemployment benefits in the United States, but highlight the need for more research on the determinants of reservation wages. Our …

behaviors in 10th grade eliminates the unemployment effect, but strengthens the wage effect. As the latter is not explicable by …

Income Tax (NIT) at the bottom of the income distribution, in the presence of unemployment and wage responses to taxation … that incorporates unemployment and endogenous wages. This formula nests a broad variety of structures of the labor market … unemployment and wage responses are not taken into account …