We develop a frictional labor market model with multiple regions and heterogeneous firms to study how frictions impeding labor mobility across space affect the joint allocation of labor across firms and regions. Bringing the model to matched employer-employee data from Germany, we find that...

We develop a job-ladder model with labor reallocation across firms and space, which we design to leverage matched employer-employee data to study differences in wages and labor productivity across regions. We apply our framework to data from Germany: twenty-five years after the reunification,...

We develop a job-ladder model with labor reallocation across firms and space, which we design to leverage matched employer-employee data to study differences in wages and labor productivity across regions. We apply our framework to data from Germany: twenty-five years after the reunification,...

Since the early 1980s, the U.S. economy has experienced a growing wage differential: high-skilled workers have claimed an increasing share of available income, while low-skilled workers have seen an absolute decline in real wages. How and why this disparity has arisen is a matter of ongoing...