We study how human capital diversification, in the form of double majoring, affects the response of earnings to labor market shocks. Double majors experience substantial protection against earnings shocks, of 56%. This finding holds across different model specifications and data sets....

This paper explores how financial frictions and financial shocks can contribute to jobless recoveries. We incorporate financial frictions and financial shocks into a real business cycle model in which firms determine not only their investment in capital and employment of workers, but also...