While the significant decline in US firm formation rates over the past 30 years has raised concern about the health of the US economy, its causes are not yet fully understood. I argue that a significant part of this decline can be explained as an efficient response to size biased technological...

Why do employed persons in large firms earn more than employed persons in small firms, even after controlling for observable characteristics? Complementary to previous results, this paper proposes a mechanism that gives an answer to this question. In the model, individuals accumulate human...

This paper develops a two-period labor market model with imperfect information and on-the-job training, and uses data from National Longitudinal Survey of Youth 1979 Cohorts (NLSY79) to test its predictions. We find that training does not explain the positive relationship between employer size...