We study a directed search equilibrium with risk-averse workers who can search on the job and accumulate non-contingent assets under a borrowing limit. Search outcomes affect earnings and wealth accumulation. In turn, wealth and earnings affect search decisions by changing the optimal trade-off...

Using data from the Census, ACS and the CPS, we document that a large part of long-run reallocation of labor from the goods to the service sector took place within narrowly defined groups of workers. In particular, sectoral reallocation reflects a labor market trend that is distinct from the...

Using directed search to model the product market and the labor market, I show that large plants can pay higher wages to homogeneous workers and earn higher expected profit per worker than small plants, although plants are identical except size. A large plant charges a higher price for its...