Empirical studies document that resource reallocation across production units plays an important role in accounting for aggregate productivity growth in the US manufacturing. Financial market frictions could distort the reallocation process and hence may hinder aggregate productivity growth....

In a life-cycle dynastic family model with endogenous fertility, labor-leisure, and accumulations of human and physical capital, this study examines the growth and welfare effects of parental leave subsidization when there is human capital externality. Compared with the social optimum, such...