Download or read book Essays on Frictional Labour Markets with Heterogeneous Agents written by Markus Riegler and published by . This book was released on 2015 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on Heterogeneous Agents written by Christian Bredemeier and published by . This book was released on 2010 with total page 178 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on Heterogeneity in Labor Markets written by Gonul Sengul and published by . This book was released on 2009 with total page 192 pages. Available in PDF, EPUB and Kindle. Book excerpt: My dissertation focuses on the heterogeneity in labor markets. The first chapter proposes an explanation for the unemployment rate difference between skill groups. Low skill workers (workers without a four year college degree) have a higher unemployment rate. The reason for that " ... is mainly because they (low skill workers) are more likely to become unemployed, not because they remain unemployed longer, once unemployed" (Layard, Nickell, Jackman, 1991, p. 44). This chapter proposes an explanation for the difference in job separation probabilities between these skill groups: high skill workers have lower job separation probabilities as they are selected more effectively during the hiring process. I use a labor search model with match specific quality to quantify the explanatory power of this hypothesis on differences in job separation probabilities and unemployment rates across skill groups. The second chapter analyzes the effects of one channel of interaction (job competition) between skill groups on their labor market outcomes. Do skilled workers prefer unskilled jobs to being unemployed? If so, skilled workers compete with unskilled workers for those jobs. Job competition generates interaction between the labor market outcomes of these groups. I use a heterogeneous agents model with skilled and unskilled workers in which the only interaction across groups is the job competition. Direct effects of job competition are reducing skilled unemployment rate (since they have a bigger market) and increasing the unskilled unemployment rate (since they face greater competition). However number of vacancies respond to job competition in equilibrium. For instance, unskilled firms have incentives to open more vacancies since filling a vacancy is easier if there is job competition. Thus how unskilled unemployment and wages are affected by job competition depends on which effect dominates. The results for reasonable parameter values show that job competition does reduce the average unemployment rate. It reduces the skilled unemployment rate more, generating an increase in unemployment rate inequality. However, the employment rate at skilled jobs is unaffected. The third chapter focuses on skill biased technological change. Skill biased technological change is one of the explanations for the asymmetry between labor market outcomes of skill groups over the last few decades. However, during this time period there were also skill neutral shocks that could contribute to these outcomes. The third chapter analyzes the effects of skill biased and neutral shocks on overall labor market variables. I use a model in which skilled and unskilled outputs are intermediate goods, and final good sector receives all the shocks. A numerical exercise shows that both skilled and unskilled unemployment rates respond to shocks in the same direction. The response of unemployment rate to skill neutral shocks is bigger than the response to skill biased shocks for both skill groups. However, the unskilled unemployment changes more than the skilled unemployment rate as a response to skill neutral shocks. Thus, skill neutral shocks reduce the unemployment rate gap between skill groups.

Download or read book Three Essays on Frictional Labour Markets written by David Pothier and published by . This book was released on 2013 with total page 116 pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis contributes to the understanding of how socio-economic factors affect the functioning of modern labour markets. It belongs to the strand of academic literature that departs from the standard Walrasian model of the labour market, and considers matching and information frictions to be important determinants of observed labour market phenomena. Within this general framework, this thesis analyses how different forms of agent heterogeneity / socio-demographic identity, productivity, and wealth - affect wage rates and the level of employment in competitive labour markets. The first chapter studies how occupational segregation - the sorting of workers across occupations based on their demographic characteristics - affects the allocation of talent in the labour market. When job vacancy information is transmitted via workers' group-biased social contacts, occupational segregation is found to be a robust equilibrium outcome. The chapter shows that while occupational segregation implies benefits in terms of the job-finding probability of individual workers, it may also engender significant allocative inefficiencies when workers differ in terms of their productivity across occupations. The second chapter examines how heterogeneous workers and firms sort across formal (market-based) and informal (network-based) recruitment channels. When worker and firm productivity are unobservable the two recruitment channels effectively compete in terms of their screening capability. Matching frictions are shown to generate a sorting externality that leads to a multiplicity of equilibrium outcomes, depending on the skill-bias within social networks and the productivity dispersion among workers and firms. The third chapter, co-authored with Damien Puy, examines to what extent variations in wages and employment over the business-cycle can explain the counter-cyclical properties of the income distribution. We show that demand composition effects are an important channel through which aggregate supply shocks are propagated through the economy, and that these have important distributional consequences. In particular, we find income inequality (as measured by the Gini coefficient) to be counter-cyclical. Consistent with empirical evidence, this is shown to be largely due to changes in the level of employment and to a lesser degree to variations in relative factor prices.

Download or read book Three Essays on Frictional Labor Markets written by Georg Duernecker and published by . This book was released on 2010 with total page 152 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Three Essays on Heterogeneous Workers in Imperfect Labour Markets written by Christian Manger and published by . This book was released on 2010 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays in incomplete insurance and frictional labour markets written by Rigas Oikonomou and published by . This book was released on 2010 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on Frictional Labor Market written by Eunbi Ko and published by . This book was released on 2019 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation develops two models of frictional labor market which provide tools to understand some important phenomena of the US labor market.The first chapter models labor market choices of workers depending primarily on his/her marital status and the partner's labor market outcome if the worker is married. In the household of a married couple, an increase in the husband's wage leads to a rise in the number of days his wife remains out of the labor force. If only one of the couple is employed, a wage increase for the employed partner lengthens the spouse's unemployment duration. Moreover, if both are employed, their wages move in the same direction. To explain these stylized facts, I construct an equilibrium model of the labor market in which a married couple jointly chooses market participation and search for and separation from a job. Calibration shows that the model can correctly account for the facts. The unified framework with endogenous market participation and frictional search is necessary to correctly predict the correlations in spouses' labor market outcomes. Using the benchmark model, I do the policy experiments of unemployment insurance (UI) and the earned income tax credit (EITC). I show that generous UI can increase the employment-population ratio by mitigating married females' disincentive to participate in the market. I also show that the EITC increases the employment of single parents but it decreases the employment of workers who belong to other types of households. In the sense of welfare, the EITC enhances welfare for all single parents, but it reduces welfare of some married parents by reducing the value of working wives.In the second chapter, I construct a directed search model of the labor market with two types of workers and two types of firms to show that an asymmetric positive productivity shock could cause a recent upward shift of the US Beveridge curve. The model possesses an equilibrium in which unskilled workers apply to both high-tech and low-tech firms and skilled workers apply only to high-tech firms. The productivity difference between sectors affects unskilled workers' application strategy: the larger the productivity gap is, the more unskilled workers apply to high-tech firms. The calibration suggests that the productivity difference between sectors has become greater after the recession than before. This makes unskilled workers apply to a high-tech firm with a greater probability than before, which results in the lower average job-finding rate and an upward shift of the Beveridge curve.

Download or read book Essays in Macroeconomics written by Annika Bacher and published by . This book was released on 2022 with total page 158 pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis is composed of three independent essays in heterogeneous agent macroeconomics. They all explore how family structure affects investment choices and labor market outcomes of individuals. The first chapter, Housing and Savings Behavior Across Family Types, studies how family structure in the form of marital status and changes thereof affect housing demand. I develop a life-cycle model of housing and financial portfolio choice with dynamic and heterogeneous family types that I calibrate to household survey data from the United States. My findings indicate that divorce risk encourages precautionary savings of couples and reduces their demand risky assets and for indivisible housing. Prospective marriage, lower income levels and larger exposure to income fluctuations prevent singles from becoming homeowners. As a result, abstracting from distinct family types overstates the effectiveness of housing policies such as lowering property taxes and reducing housing transaction costs by up to over 100%. This misspecification is largest among young households, who are most likely to be single and whose marital transition risk is highest. In contrast, regulations that facilitate stock market participation help to foster wealth accumulation, because they encourage investment in high return assets that are cheaper to liquidate in the event of a marital or labor income shock. In the second chapter, The Gender Investment Gap over the Life-Cycle, I document with data from the Survey of Consumer Finances that single women hold on average less risky portfolios than single men. To understand the sources of this "Gender Investment Gap", I develop a life-cycle model of portfolio choice that allows for gender differences along observable characteristics and stochastic processes. The model is able to replicate the empirical patterns without introducing gender heterogeneity in preferences. Counterfactual simulations reveal that lower income levels and larger household sizes (mainly through the presence of children) of single women make it optimal for them to invest less risky. Hence, the gender wage gap gets amplified because it results in investment behavior that pays on average lower returns. Importantly, not only current-period income levels and number of household members help to explain this finding but also expectations over their future realizations. The third chapter, Joint Search over the Life-Cycle, co-authored with Philipp Grübener and Lukas Nord, focuses on labor market outcomes and couples. Specifically, we study how intra-household insurance against individual job loss through increased spousal labor market participation, also called the added worker effect, varies over the life cycle. First, we show in U.S. data that the added worker effect is much stronger for young than for old households. A stochastic life cycle model of two-member households with job search in a frictional labor market is capable of replicating this finding. The model suggests that a lower added worker effect for the old is driven primarily by better insurance through asset holdings. Human capital differences between employed young and old contribute to the difference but are quantitatively less important, while differences in job arrival rates play a limited role.

Download or read book Essays on Frictional Labour Markets in the Presence of Capital Skill Complementarity written by David Zentler-Munro and published by . This book was released on 2019 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The first paper of this thesis considers the impact of minimum wages when search frictions are present and firms can substitute away from low skilled workers to both higher skilled workers and to capital. This represents a contribution to the search literature, which typically assumes labour is the only input of production and perfect substitution between labour inputs. I examine whether the model I develop features significant nonlinearities in the impact of the minimum wage on unemployment. I find that the theoretical contribution of this paper, i.e. allowing for search frictions and imperfect substitutability of factor inputs, is quantitatively significant. Specifically, the nonlinear unemployment response in my model does not occur if I use the typical assumptions of the search literature. In my second paper, I develop a structural model that can help to quantify the relative importance of institutions, labour market frictions and technology in explaining wage inequality. This contribution is a complement to the empirical literature on wage inequality, which tends to emphasise either technological explanations or institutional ones but rarely considers the two jointly. I take my model to the data to test whether estimates of capital skill complementarity in \citet{krusellohanianriosrull} are robust to the inclusion of search frictions. I find this is indeed the case: parameter estimates change very little when allowing for search frictions. My final paper returns to the minimum wage model of my first paper and considers how allowing for asset accumulation by workers changes the model's predictions regarding the relationship between the minimum wage and consumption inequality. I find that allowing for asset accumulation by workers suggests the minimum wage is more successful at reducing consumption inequality than models without asset accumulation would indicate.

Download or read book Essays in Incomplete Insureance and Friction Labour Markets written by Rigas Oikonomou and published by . This book was released on 2010 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Three Essays on Matching in Heterogeneous Labor Markets written by Alain Delacroix and published by . This book was released on 1999 with total page 179 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on Market Frictions Economic Shocks and Business Fluctuations written by Seungho Nah and published by . This book was released on 2010 with total page 129 pages. Available in PDF, EPUB and Kindle. Book excerpt: Abstract: In the first essay, 'Financial Frictions, Intersectoral Adjustment Costs, and News-Driven Business Cycles', I show that an RBC model with financial frictions and intersectoral adjustment costs can generate sizable boom-bust cycles and plausible responses of stock prices in response to a news shock. Booms in the labor market, which make it possible for both consumption and investment to increase in response to positive news, are caused through two channels: the increases in value of marginal product of labor and the increases in value of collateral. Both of these channels enable firms to hire more workers. Intersectoral adjustment costs contribute to both channels by increasing the relative price of output and capital during expansions. Financial frictions enter in the forms of collateral constraints on firms, which influence the latter channel, and the financial accelerator mechanism driven by agency costs, which amplifies all the key variables. My model differs from previous studies in its ability to generate boom-bust cycles without restricting the functional form of consumption in household preferences and without requiring investment adjustment costs, variable capital utilization, or any nominal rigidities. In the second essay, 'Financial and Real Frictions as Sources of Business Fluctuations', I show that a negative shock to a financial or real friction in an economy can generate quantitatively significant and persistent recessions, even without a decrease in exogenous aggregate total factor productivity in a heterogeneous agents DSGE model. The increase in uncertainty that a firm is facing when it makes capital adjustment, however, is found to have a limited or dubious influence on economic activities. The roles of collateral constaints as a financial friction and nonconvex capital adjustment costs as a real friction in aggregate fluctuations are examined in this propagation mechanism. When these frictions become strengthened, the degree of capital misallocation is intensified, which leads to a drop of endogenous aggregate total factor productivity. As agents expect that the return to investment and endogenous TFP decrease, they reduce aggregate investment sharply, which also leads to a drop in employment. Interruption of efficient resource allocation coming from these two frictions is found out to be enough to generate a large and persistent aggregate flucutations even without introducing heterogeneity in firm-level productivity.

Download or read book Three Essays on Frictional Labor Markets written by Sumon Majumdar and published by . This book was released on 2001 with total page 348 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on a Frictional Labour Market with Inactive Workers written by Antonio Parlavecchio and published by . This book was released on 2017 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays in Quantitative Macroeconomics written by Philipp Grübener and published by . This book was released on 2021 with total page 191 pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis contains four independent essays in heterogeneous agent macroeconomics. They explore the sources of income inequality and income risk and study the optimal design of public redistribution and insurance. The first chapter, joint with Filip Rozsypal, studies the origins of idiosyncratic earnings risk in frictional labor markets, with a particular focus on the role of firms for worker earnings risk. First, using administrative matched employer-employee data from Denmark, we document key properties of the worker earnings growth distribution, the firm revenue growth distribution, and their joint distribution. The worker earnings and firm revenue growth distributions exhibit strong deviations from normality, in particular excess kurtosis, with many workers and firms experiencing very small changes to their earnings/revenues, but a significant minority experiencing very large changes. Large earnings losses are more likely for workers in firms with negative revenue growth, driven both by separations to unemployment and earnings losses on the job. Second, we develop a model framework consistent with the data, with four key features: i) frictional labor markets and on the job search to capture unemployment risk and wage growth through a job ladder, ii) multi-worker firms to capture gross and net worker flows, iii) risk averse workers such that earnings risk matters, and iv) contracting with two-sided limited commitment because earnings of job stayers are changing infrequently in the data. Third, we use the model to explore policies designed to mitigate earnings fluctuations. The second chapter, joint with Annika Bacher and Lukas Nord, studies one particular private insurance margin against individual income risk only available to couples, which is the so called added worker effect. Specifically, we study how this intra-household insurance against individual job loss through increased spousal labor market participation varies over the life cycle. We show in U.S. data that the added worker effect is much stronger for young than for old households. A stochastic life cycle model of two-member households with job search in a frictional labor market is capable of replicating this finding. The model suggests that a lower added worker effect for the old is driven primarily by better insurance through asset holdings. Human capital differences between employed young and old contribute to the difference but are quantitatively less important, while differences in job arrival rates play a limited role. In the third chapter, joint with Axelle Ferriere, Gaston Navarro, and Oliko Vardishvili, we study optimal redistribution, taking into account not just the large income and wealth inequality in the data, but also the distribution of income risk that is key in the first two chapters. The U.S. fiscal system redistributes through a rich set of taxes and transfers, the latter accounting for a large part of the income of the poor. Motivated by this, we study the optimal joint design of transfers and income taxes. Within a simple heterogeneous-household framework, we derive analytical results on the optimal relationship between transfers and tax progressivity. Higher transfers are associated with lower optimal income tax progressivity. Redistribution is achieved with generous transfers while efficiency is preserved via a lower progressivity of income taxes. As such, the optimal tax-and-transfer system features larger progressivity of average than of marginal tax rates. We then quantify the optimal tax-and-transfer system in a rich incomplete-market model with realistic distributions of income, wealth, and income risk. The model features a novel flexible functional form for progressive income taxes and means-tested transfers. Relative to the current U.S. fiscal system, the optimal policy consists of more generous means-tested transfers, which phase-out at a slower rate. These larger transfers are financed with higher tax rates, but the taxes are not more progressive than the current system. The fourth chapter, joint with Axelle Ferriere and Dominik Sachs, also studies optimal redistribution, but instead of considering a stationary environment it analyzes the dynamics of the equity-efficiency trade-off along the growth path. To do so, we incorporate the optimal income taxation problem into a state-of-the-art multi-sector structural change general equilibrium model with non-homothetic preferences. We identify two key opposing forces. First, long-run productivity growth allows households to shift their consumption expenditures away from necessities. This implies a reduction in the dispersion of marginal utilities, and therefore calls for a welfare state that declines along the growth path. Yet, economic growth is also systematically associated with an increase in the skill premium, which raises inequality and the desire to redistribute. We quantitatively analyze these opposing forces for two countries: the U.S. from 1950 to 2010, and China from 1989 to 2009. Optimal redistribution decreases at early stages of development, as the role of non-homotheticities prevails. At later stages of development the rising income inequality dominates and the welfare state should become more generous.

Download or read book Frictional Labor Markets and Policy Interventions written by Alessandra Pizzo and published by . This book was released on 2016 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The objective underlying the three chapters of this thesis is the understanding of the functioning of the labor market to make a diagnosis about the potential regulatory role of a public authority in this market. ln the first chapter, I analyze, from a purely "positive" point of view, the ability of the model with search and matching frictions to reproduce short-term fluctuations of labor market variables in the United States. I propose a new calibration strategy, within a general equilibrium framework with sticky prices. In the second chapter (co-written with F. Langot), we study the determinants of changes in the labor supply over the last fifty years. Changes in the tax wedge, and two variables reflecting the institutional framework (the generosity of income in case of "non-employment" and workers' bargaining power), can explain the different trajectories of the rate employment and hours worked observed in the United States and three European economies (France, Germany and the United Kingdom). ln the third chapter, I analyze the performance of two alternative systems of social security, within the framework of a model with heterogeneous agents in terms of wealth. The agents are subject to a risk of unemployment, and the planner can provide insurance through a redistibutive tax system, based on a progressive tax and / or unemployment insurance. The progressive tax system is superior in terms of aggregate welfare to the insurance provided through unemployment benefits, through its effect on the functioning of the labor market.