In the standard macroeconomic search and matching model of the labor market, there is a tight link between the quantitative effects of (i) aggregate productivity shocks on unemployment and (ii) unemployment benefits on unemployment. This tight link is at odds with the empirical literature. We...

Although the quantitative relationship between employment cyclicality and wage cyclicality is central for the dynamics of macroeconomic models, there is little empirical evidence on this topic. We use the German AWFP dataset to document that wage cyclicalities are very heterogeneous across...

This paper analyses theoretically and empirically how employment subsidies should betargeted. We contrast measures involving targeting workers with low incomes/abilities andtargeting the unemployed under the criteria of "approximate welfare efficiency" (AWE)...

In a perfect labor market severance payments can have no real effects as they can beundone by a properly designed labor contract (Lazear 1990). We give empirical content tothis proposition by estimating the effects of EPL on entry wages and on the tenure-wageprofile in a quasi-experimental...