Standard search models are unreliable for structural inference of the underlying sources ofwage inequality because they are inconsistent with observed residual wage dispersion. Weaddress this issue by modeling skill development and duration dependence in unemploymentbenefits in a random on the...

It is puzzling that people feel quite unhappy when they become unemployed, while at thesame time active labor market policies are needed to bring unemployed back to work morequickly. Using data from the German Socio-Economic Panel, we investigate whether there isindeed such a puzzle. First, we...

Unlike other disability systems in developed economies, the Spanish system allows partiallydisabled individuals to work while receiving disability benefits. The puzzle is, however, thatemployment rates in this group of individuals are very low. The aim of this paper is tounderstand the...

This paper studies optimal unemployment benefit levels and optimal proportional income taxrates over the business cycle. Previous research suggests that policy makers should makeunemployment insurance (UI) dependent on the business cycle because the UI system canbe used to smooth consumption...

In this paper, we use unique data from a field experiment in the Swedish labor market toinvestigate how past and contemporary unemployment affect a young worker’s probability ofbeing invited to a job interview. In contrast to studies using registry/survey data, we havecomplete control over the...

In the years 2003-2008 the Russian economy experienced a period of strong and sustainedgrowth, which was accompanied by large worker turnover and rising informality. Weinvestigate whether the burden of informality falls disproportionately on job separators(displaced workers and quitters) in the...

A substantial number of young unemployed participate in active labor market programs(ALMP) in Germany each year. While the aims of these programs are clear – a fast reintegrationinto employment or enrollment in further education – a comprehensive analysis oftheir effectiveness has yet to be...

It is argued that migration from Mexico to the US and its corresponding return migration aredetermined by international wage differentials and preferences for origin. We use a model ofjob search, savings and migration to show that job turnover is a crucial determinant of themigration process...

Labor markets in the transition economies of Central and Eastern Europe underwent adramatic transformation. Notably, this transformation took place within just a few years. Untilthe mid-2000s job opportunities were scarce and unemployment was high. But since thenlabor demand has picked up and...

'Marginal employment', i.e. employment at low working hours and earnings not covered bysocial security, has been gaining importance in the German economy over the past decade.Using a large newly available panel data set and statistical matching techniques, we analysethe effects of marginal...