This work introduces a new mechanism generating procyclical comovements of labor productivity, employment, through endogenous variations of workers' effort, in a simple model with efficiency wages, near a locally indeterminate steady state. A current endogenous countercyclical uncertainty shock...

What is the role of formal labor market institutions in the impact of crises on wages and employment? We study wage adjustment during the recent crisis in Italy's regulated labor market using the unregulated informal labor market as a counterfactual. We use a unique dataset on immigrant workers...