This paper provides quantitative estimates of the welfare costs of nominal wage contracts. We find that the welfare costs of such contracts are fairly small and are generally relatively insensitive to changes in the economic environment. We then study how contract length might respond to changes...

We develop a simple model featuring search frictions and a nondegenerate labor supply decision along the extensive margin. The model is a standard version of the neoclassical growth model with indivisible labor with idiosyncratic shocks and frictions characterized by employment loss and...