It is often argued that informal labor markets in developing countries promote growth by reducing the impact of regulation. On the other hand informality may reduce the amount of social protection offered to workers. We extend the wage-posting framework of Burdett and Mortensen (1998) to allow...

Our paper contributes to the studies on the relationship between workers' human capital and their decision to become self-employed as well as their probability to survive as entrepreneurs. Analysis from a panel data set of research analysts in investment banks over 1988-1996 reveals that star...

Standard search and matching models of equilibrium unemployment, once properly calibrated, can generate only a small amount of frictional wage dispersion, i.e., wage differentials among ex-ante similar workers induced purely by search frictions. We derive this result for a specific measure of...

In this paper I explore optimal employment contract design in a random search framework, where workers search on and off the job for employment opportunities similar to that of Lentz (2010) and Bagger and Lentz (2013). The worker determines the frequency by which employment opportunities arrive...

This paper analyzes the career progression of skilled and unskilled workers, with a focus on how careers are affected by economic downturns and whether formal skills, acquired early on, can shield workers from the effect of recessions. Using detailed administrative data for Germany for numerous...

The recent literature on local schooling externalities in the U.S. is rather mixed: positive external effects of average education levels are hardly to be found but, in contrast, positive externalities from the share of college graduates can often be identified. This paper proposes a simple...

From 1940 to 1990, a 10 percent increase in a metropolitan area's concentration of college-educated residents was associated with a .8 percent increase in subsequent employment growth. Instrumental variables estimates support a causal relationship between college graduates and employment growth,...

This chapter reviews academic research on the connections between agglomeration and innovation. We first describe the conceptual distinctions between invention and innovation. We then describe how these factors are frequently measured in the data and some resulting empirical regularities....

In 2011, a reform in the United Arab Emirates allowed any employer to renew a migrant's visa upon contract expiration without written permission from the initial employer. We find that the reform increased incumbent migrants' earnings and firm retention of these workers. This occurs despite an...

The cross-national intragenerational income mobility literature assumes within-country mobility is invariant over the period measured. We argue that a great social transformation--German reunification-- abruptly and permanently altered economic mobility. Using standard measures of mobility (with...