This paper explores, both theoretically and empirically, how firing costs affect worker productivity and turnover. We develop a model in which workers are essential to knowledge transfer between firms and worker effort is firm-specific in the sense that a worker can be fired before reaping the...

This paper evaluates the dynamic response of worker flows, job flows, and vacancies to aggregate shocks in a structural vector autoregression. We identify demand, monetary, and technology shocks by imposing sign restrictions on the responses of output, inflation, the interest rate, and the...

This paper studies the role of job-to-job transitions in driving unemployment dynamics. Three stylized facts emerge from applying and extending a well-known stocks-flows based decomposition to the UK and US labour markets for the past two decades. First, the variations in the job-to-job...

This paper disciplines a model with search over match quality using microeconomic evidence on worker mobility patterns and wage dynamics. In addition to capturing these individual data, the model provides an explanation for aggregate labor market patterns. Poor match quality among first jobs...

This paper proposes an explicit model of spillovers through labor flows in a framework with search frictions. Firms can choose to innovate or to imitate by hiring a worker from a firm that has already innovated. We show that if innovating firms can commit to long-term wage contracts with their...

Employees often learn about their ability while working, and the resulting beliefs interact with pay incentives to shape employment outcomes. This paper investigates this issue within a model that incorporates learning about ability on the job, dynamic selection, effort, and variation in pay...

This paper examines how job quality varies over the cycle. Empirical evidence from the National Longitudinal Survey of Youth (NLSY) suggests match quality is procyclical. This interpretation is corroborated in a calibrated model with on-the-job search. In the model, more high quality matches are...

The focus of this chapter is to consider new developments in the search and matching literature where wages, quit turnover and unemployment are endogenously determined in economies with aggregate shocks. The aim of the discussion is not only to highlight possible market failures but also to...

This paper studies the extent to which the cyclicality of gross and net occupational mobility shapes that of aggregate unemployment and its duration distribution. Using the SIPP, we document the relation between workers' (gross and net) occupational mobility and unemployment duration over the...

This paper provides new evidence on the reallocation of workers across firms and industries with different technologies in response to increased import competition from developing countries. Using employer-employee matched data for the Swedish manufacturing sector, we find increased assortative...