Recessions often have detrimental effects on both employment and equity returns, forcing individuals to make decisions about how to balance risks to their labor and capital income. In this paper, we study how individuals allocate their limited attention between capital income and labor income...

A strong state sector can act as an adverse factor shock in a relatively fixed factor supply environment. Low factor mobility across regions makes China an ideal setting to study this factor supply channel. We find that a strong local SOE presence has a substantial adverse growth effect on local...

This paper develops a framework for studying the effects of higher trade openness on the wage distribution that emphasizes within-industry labor reallocation across firms, strong skill-productivity complementarities in production and heterogenous fixed export costs across firms. Assuming no...

Patients requiring kidney transplant may have proxy donors: people who want to donate a kidney to the patient, but cannot due to medical incompatibility. However, patients can swap proxy donors, so that each swapping patient ends up with a compatible donor. Some patients, called overloaded, have...

A planner chooses an allocation of a divisible resource and charges agents based on their reported type. We discover and describe the set of dominant-strategy incentive-compatible (strategy-proof) mechanisms when the planner has the ability to observe the true type of agents ex-post and punish...

We develop a model of a frictional labor market with idiosyncratic and aggregate shocks, sticky wages, and two-sided lack of commitment between workers and firms. In this environment, wages are allocative in the sense that inefficient job separations arise when the wage-to-productivity ratio...

For a large set of countries, we document how the labor earnings inequality varies with GDP per capita. As countries get richer, the mean-to-median ratio and the Gini coefficient decline. Yet, this decline masks divergent patterns: while inequality at the top of the earnings distribution falls,...

We study job displacement in France. In the medium run, losses in firm-specific wage premium account for a substantial share of the overall cost of displacement. However, and despite the positive correlation between premium and productivity in the cross-section of firms, we find that workers are...

Occupational specificity of human capital motivates an important role of occupational reallocation for the economy's response to shocks and for the dynamics of inequality. We introduce occupational mobility, through a random choice model with dynamic value function optimization, into a...