In the standard macroeconomic search and matching model of the labor market, there is a tight link between the … quantitative effects of (i) aggregate productivity shocks on unemployment and (ii) unemployment benefits on unemployment. This … model, unemployment benefits affect households' behavior directly, without having to run via the bargained wage. A …

In the standard macroeconomic search and matching model of the labor market, there is a tight link between the … quantitative effects of (i) aggregate productivity shocks on unemployment and (ii) unemployment benefits on unemployment. This … model, unemployment benefits affect households' behavior directly, without having to run via the bargained wage. A …

I study a dynamic search-matching model with two-sided heterogeneity, a production complementarity that induces labor … market sorting, and aggregate shocks. In response to a positive productivity shock, incentives to sort increase …. The distribution of unemployment worker types adjusts slowly, which amplifies job creation in the short run. In the long …