Gaur, Meghana; Grigsby, John; Hazell, Jonathon; Ndiaye, … - 2023
We introduce dynamic incentive contracts into a model of unemployment dynamics and present three results. First, wage … cyclicality from incentives does not dampen unemployment dynamics: the response of unemployment to shocks is first … cyclicality from bargaining dampens unemployment dynamics through the standard mechanism. Third, our calibrated model suggests 46 …