This study demonstrates that nonlinearities, coupled with worker heterogeneity, make it possible to reconcile the Diamond-Mortensen-Pissarides model with the labor market dynamics observed in the United States. Nonlinearities, induced by firings and downward real wage rigidities, magnify...

This study demonstrates that nonlinearities, coupled with worker heterogeneity, make it possible to reconcile the Diamond Mortensen Pissarides model with the labor market dynamics observed in the United States. Nonlinearities, induced by firings and downward real wage rigidities, magnify...

Since the last recession, it is usually argued that older workers are less affected by the economic downturn because their unemployment rate rose less than the one of prime-age workers. This view is a myth: older workers are more sensitive to the business cycle. We document volatilities of...

This paper presents a theoretical foundation and empirical evidence in favor of the view that the tax on continued activity not only decreases the participation rate by inducing early retirement, but also badly affects the employment rate of older workers just before early retirement age....

The public sector hires disproportionately more educated workers. To rationalize this finding, we propose a model with a perfectly competitive private sector, and non-Walrasian public sector. Our economy also features heterogeneity across individuals and jobs, and a simple sorting mechanism that...

This article sheds light on the dynamics of the Argentine labor market, using quarterly data from the Argentine Labor Force Survey for the period 2003Q3 to 2020Q1. We examine quarterly transition rates in a four-state model with formal employment, informal employment, unemployment, and...