We develop a model economy in the spirit of Caucutt, Guner and Knowles (2002). Each period single men and women with various levels of productivity are matched in a marriage market segmented by age and race. They decide whether or not to marry taking into account what their next best option is....

as in Melitz (2003). This increases …firms´ incentives to hire or …re workers as idiosyncratic productivity shocks occur, thereby increasing job turnover and, because of the search frictions, spreading the wage distribution. Preliminary simulations at plausible parameter values suggest that...