This paper studies how and to what extent labor market friction affects individuals' schooling decisions. High job-finding rates and low job separation rates encourage schooling investment by extending the expected duration for exploiting the accumulated human capital. High job-to-job transition...

By developing a job search model with college degree as a noisy signal, this paper analyzes the underlying mechanism of a 'degree-inflation,' measured by the proportion of a highly educated workforce performing unskilled tasks (i.e., cross-skill matches). Skilled workers can perform either...

This paper develops a tractable job search model with information friction to analyze the underlying link between the performance-based compensation scheme and labor market fluctuations. Workers privately learn their match quality upon starting the job and keep searching for better paying jobs....

This paper develops a tractable multi-sector endogenous growth model with labor market friction and human capital accumulation to analyze the underlying link between economic growth and labor market institutions. The model, calibrated based on the Japanese structural transformation episodes,...

This paper analyzes the coexistence of on-the-job (general) training and on-the-job search in a frictional labor market where firms post skill-dependent labor contracts to preemptively back-load compensation after training. The back-loaded compensation scheme discourages trained workers'...