Hours volatility has changed non-monotonically across skill groups since the mid-1980s. This study researches the implications of such changes on the welfare costs of business cycles. Using a partial equilibrium model in which hours fluctuations are the only source of uncertainty, we find that...

Using surveys of households across thirteen countries, we study how much individuals would be willing to pay to eliminate business cycles. These direct estimates are much higher than traditional measures following Lucas (2003): on average, households would be prepared to sacrifice around 5-6% of...