This paper develops a random-matching model of a frictional labor market with firm and worker dynamics. Multi-worker firms choose whether to shrink or expand their employment in response to shocks to their decreasing returns to scale technology. Growing entails posting costly vacancies, which...

We develop a tractable quantitative, general equilibrium, oligopsony model of the labor market that we use to measure the macroeconomic implications of labor market power. Strategic interaction complicates inference of parameters that are key to this exercise. To address this challenge, we...

A flexible labor margin allows households to absorb shocks to asset values with changes in hours worked as well as changes in consumption. This ability to partially offset wealth shocks by varying hours of work can significantly alter the household's attitudes toward risk, as shown in Swanson...

The common European labor market encourages worker mobility that enhances allocative efficiency, but certain institutional features may trigger inefficient migration. As a job in one of Europe's high-income countries typically also entails coverage in a generous welfare and social insurance...

Government schemes that compensate workers for the loss of income while they are on short hours (known as short-time work compensation schemes) make it easier for employers to temporarily reduce hours worked so that labor is better matched to output requirements. Because the employers do not lay...

Over the past 50 years, the U.S. and several European labor markets have undergone two most incisive developments: job market polarization and deunionization. In this paper, we argue that routine-biased technical change is not only the driving force behind polarization, as prevalently assumed,...

Using information on desired and actual hours of work, we formulate a discrete choice model of constrained labor supply, where involuntary unemployment as well as over- and underemployment are modelled in a theoretically consistent way. Using data from the German Socio-Economic Panel (SOEP) and...

While economic studies often assume that labor markets are in equilibrium, there may be specialized labor markets that are likely in disequilibrium. We develop a new methodology to improve the estimation of a reduced form disequilibrium model from the existing models by incorporating...