Combining microeconomic evidence with macroeconomic theory, the authors present an integrated approach to wage and employment determination in an economy where firms pay above market"efficiency wages"to prevent trained workers from quitting. The model offers predictions about the behavior of...

Using data from Mexico, the authors study empirically the link between trade policy and individual income risk and the extent to which this varies across workers of different human capital (education) levels. They use longitudinal income data on workers to estimate time-varying individual income...

This paper develops a framework for the quantitative analysis of individual income dynamics, mobility and welfare. Individual income is assumed to follow a stochastic process with two (unobserved) components, component representing measurement error or transitory income shocks and an...