This paper presents a tractable model to explain the coexistence of temporary and permanent employment contracts. In our environment, workers are ex-ante heterogeneous and self-select into markets characterized by different labor contracts offered by firms. As a result, segmented labor markets...

Cross-sectional data show that money holding differs significantly over household consumption and age. Liquidity demand for money (i.e., money holding per dollar of consumption) decreases as household consumption increases. It also increases with household age conditional on the level of...

Using the Survey of Income and Program Participation (SIPP) we estimate quarterly labor earnings risk across 21 industries of the US economy. We document a significant and positive association between earnings risk (both permanent and transitory) and average log-earnings across industries. The...