We investigate the role of information frictions in the US labor market using a new nationally representative panel dataset on individuals' labor market expectations and realizations. We find that expectations about future job offers are, on average, highly predictive of actual outcomes. Despite their predictive power, however, deviations of ex post realizations from ex ante expectations are often sizable. The panel aspect of the data allows us to study how individuals update their labor market expectations in response to such shocks. We find a strong response: an individual who receives a job offer one dollar above her expectation subsequently adjusts her expectations upward by $0.47. We embed the empirical evidence on expectations and learning into a model of search on- and off- the job with learning, and show that it is far better able to fit the data on reservation wages relative to a model that assumes complete information. We use the framework to gauge the welfare costs of information frictions which arise because individuals make uninformed job acceptance decisions and find that the costs due to information frictions are sizable, but mitigated by the presence of learning.
Veranstaltungsreihe: Macroeconomics and Labor Markets (en)
Robot imports and firm-level outcomes
We use French data over the 1994-2013 period to study how imports of industrial robots affect firm-level outcomes. Guided by a simple model, we develop various empirical strategies to identify the causal effects of robot adoption. Our results suggest that, while demand shocks generate a positive correlation between robot imports and employment at the firm level, exogenous exposure to automation leads to job losses. We also find that robot exposure increases productivity and some evidence that it may increase the relative demand for high-skill professions.
Labor market concentration of job vacancies and new hires: Implications for skill requirements, wage offers, and hiring outcomes
Job Displacement, Remarriage, and Marital Sorting
Why Has the US Economy Recovered So Consistently from Every Recession in the Past 70 Years?
The Long-Run Labor Market Effects of the Canada-U.S. Free Trade Agreement
The Impact of the Federal Pandemic Unemployment Compensation on Job Search and Vacancy Creation
Income Taxation and Job Creation
Optimal Taxation with On-the-Job Search
Marginal Propensities to Consume Before and After the Great Recession
Using a quasi maximum likelihood approach for a semi-structural model, we find highly precise and distinct estimates of consumption responses to idiosyncratic income shocks for different groups of households. Homeowners stratified by liquid wealth exhibit the most dispersion in their marginal propensities to consume. Time-varying estimates support strong patterns of heterogeneity by homeownership status and balance sheet liquidity, with economically and statistically significant increases in the sensitivity of transitory consumption for homeowners, especially those with lower liquid wealth, following the collapse in house prices with the Great Recession. These findings support consumption theories that include housing as an illiquid asset.