Three Studies on Job Finding Rate Heterogeneity in Macroeconomics
This thesis consists of three chapters, each addressing a distinct topic in the macroeconomics of the U.S. labor market. The unifying theme across all chapters is the heterogeneity in workers' job finding rates. The first chapter builds a theoretical model of the labor market to explain why the aggregate job finding rate continues to adjust slowly after a recession ends, as observed in the data. The key features of the model that explain this pattern are a pro-cyclical composition effect in the aggregate job finding rate and the gradual updating of firms’ beliefs about worker quality. The second chapter provides empirical evidence on how search disincentives – arising from temporary layoffs and unemployment insurance – impact the observed relationship between workers’ exit rates to new jobs and unemployment duration. The findings show that search disincentives mask the decrease in exit rates to new jobs with unemployment duration. The third chapter examines how wage losses among the long-term unemployed affect retirement decisions. Using both theoretical and quantitative analysis, it demonstrates that the timing of wage losses is crucial: losses late in the career lead to earlier retirement, while losses early in the career delay it.
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