An important risk faced by individuals is labor income risk associated with changes in demand for an individual’s selected occupation. This risk reflects uncertainty about future income on the current job. As an example, the declining competitiveness of the U.S. automobile or steel sectors are...

A central question in economics is how business cycles affect the allocation of resources. Focusing on the labor market, an unresolved issue is whether recessions lead to above or below average productive arrangements. Typical models of the labor market imply that recessions cleanse the labor...

The number of people wanting work, but not looking for a job, has swelled in recent years. However, their flow rate back into unemployment has been declining, so they will likely only have a modest impact on the unemployment rate.

José Mustre-del-Río analyzes labor market conditions to find increasing competitive pressures have led to strong wage growth for job switchers.

We study the effects of financial market incompleteness on occupational mobility. Incomplete insurance not only generates an increase in consumption volatility, but also a reduction in occupational mobility and a worsening of occupational matching. The correlation between occupation-level...

In the wake of the Great Recession there has been a sharp rise in the number of people who indicate they want a job, but are not actively seeking one. This group, on the periphery of the labor market, may be viewed as a "shadow labor supply." Since they are not actively seeking work, they are...

This paper examines the importance of ex-ante heterogeneity for understanding the relationship between wealth and labor supply when markets are incomplete. An infinite horizon model is estimated where labor supply is indivisible and households are ex-ante heterogeneous in their labor disutility...

Online appendix for the Review of Economic Dynamics article