I consider an economy where skilled and unskilled workers use different technologies. The rate of improvement of each technology is determined by a profit-maximizing R&D sector. When there is a high proportion of skilled workers in the labor force, the market for skill-complementary technologies...

This paper explains why firms with identical opportunities may use different technologies and offer different wages. Our key assumption is that workers must engage in costly search in order to gather information about jobs (Stigler, 1961). In equilibrium, some firms adopt high fixed cost, high...

We develop an assignment model of automation. Each of a continuum of tasks of variable complexity is assigned to either capital or one of a continuum of labor skills. We characterize conditions for interior automation, whereby tasks of intermediate complexity are assigned to capital. Interior...

In the human capital model with perfect labor markets, firms never invest in general skills and all costs of general training are borne by workers. When labor market frictions compress the structure of wages, firms may pay for these investments. The distortion in the wage structure turns...

This paper investigates the effects of increased female labor supply on the labor market. To identify a source of exogenous variation in female labor supply, we exploit differences in female labor force participation before and after WWII. The War drew many women into the labor force as men left...

The economics profession has made considerable progress in understanding the increase in wage inequality in the U.S. and the UK over the past several decades, but currently lacks a consensus on why inequality did not increase, or increased much less, in (continental) Europe over the same time...

We develop an assignment model of automation. Each of a continuum of tasks of variable complexity is assigned to either capital or one of a continuum of labor skills. We characterize conditions for interior automation, whereby tasks of intermediate complexity are assigned to capital. Interior...

We study the evolution of the social norm of "cooperation" in a dynamic environment. Each agent lives for two periods and interacts with agents from the previous and next generations via a coordination game. Social norms emerge as patterns of behavior that are stable in part due to agents'...

We develop a model of information exchange through communication and investigate its implications for information aggregation in large societies. An \textit{underlying state} determines payoffs from different actions. Agents decide which others to form a costly \textit{communication link} with,...

In aggregative games, each playerʼs payoff depends on her own actions and an aggregate of the actions of all the players. Many common games in industrial organization, political economy, public economics, and macroeconomics can be cast as aggregative games. This paper provides a general and...