This paper develops a general equilibrium model with unemployment and noncooperative wage determination to analyze the importance of incomplete markets when risk-averse agents are subject to idiosyncratic employment shocks. A version of the model calibrated to the U.S. shows that market...

During the course of development, wages and labor productivity are much higher in the nonfarm sectors of the economy than in agriculture. In this paper, we examine the sources and consequences of wage and productivity gaps in the U.S. from 1800 to 2000. We build a quantitative general...

Income drops permanently after an involuntary job displacement, but it has never been clear what happens to long-run wealth in the United States. This paper concludes that involuntary job displacement has large effects on wealth throughout a worker's lifetime. Upon displacement, wealth falls 14%...

The goal of this paper is to provide a bridge between the job displacement literature that uses long time panel data and similar work with a limited panel. This paper finds that a worker needs to replace 120% of their predisplacement income in the first two years after the event to avoid a...

How does the first job after involuntary displacement affect later income growth? Displaced workers replace 133% of their pre-displacement hourly income within two years of involuntary displacement on average but this is not enough to catch up to those of the same age and similar education....

Who fares worse in an economic downturn, low- or high-paying firms? Different answers to this question imply very different consequences for the costs of recessions. Using U.S. employer-employee data, we find that employment growth at low-paying firms is less cyclically sensitive. High-paying...

We use detailed administrative data to study how acquisitions - specifically the acquisition of a plant by a firm with a similar plant in the same local labor market - affect workers. Using an event study framework with a control group of workers at unaffected plants, we find that acquisitions...

Who fares worse in an economic downturn, low- or high-paying firms? Different answers to this question imply very different consequences for the costs of recessions. Using U.S. employer-employee data, we find that employment growth at low-paying firms is less cyclically sensitive. High-paying...

Who fares worse in an economic downturn, low- or high-paying firms? Different answers to this question imply very different consequences for the costs of recessions. Using U.S. employer-employee data, we find that employment growth at low-paying firms is less cyclically sensitive. High-paying...