Wage dispersion is generated in a sequential search environment through heterogeneity in firm productivity along with an individual wage-effort trade-off. For a given degree of TFP dispersion, the framework can generate any amount of wage dispersion. Calibrated to generate realistic gains from...

This paper studies how finite duration Unemployment Insurance (UI) benefit payments affect wage dispersion. It also provides a quantification of the implied re-entitlement effect. In a directed on-the-job search model, benefit duration is determined by recent employment history while benefit...