Search Results
Marrying for Money Ends Up Reducing Income Inequality
The marriage market constitutes a way to ameliorate income inequality in the U.S. and to create bridges across the income ladder.
Working Paper
Experimental evidence on rational inattention
We show that rational inattention theory of Sims (2003) provides a rationalization of choice models la Luce and gives a structural interpretation to probability curvature parameters as reflecting costs of processing information. We use data from a behavioral experiment to show that people behave according to predictions of the theory. We estimate attitudes to risk and costs of information for individual participants and document overwhelming heterogeneity in these parameters among a relatively homogeneous sample of people. We characterize, both theoretically and empirically, the aggregation ...
Working Paper
Marriage Market Sorting in the U.S.
We examine shifts in the U.S. marriage market, assessing how online dating, demographic changes, and evolving societal norms influence mate choice and broader sorting trends. Using a targeted search model, we analyze mate selection based on factors such as education, age, race, income, and skill. Intriguingly, despite the rise of online dating, preferences, mate choice, and overall sorting patterns showed negligible change from 2008 to 2021. However, a longer historical view from 1960 to 2020 reveals a trend toward preferences for similarity, particularly concerning income, education, and ...
Surging population growth from immigration may have little effect on inflation
U.S. population growth increased sharply recently following to a wave of immigration. This article examines what this surprise immigration surge could mean for the macroeconomy.
Working Paper
The Dual Beveridge Curve
The recent behavior of the Beveridge Curve has been puzzling, significantly differs from past recessions, and is hard to explain with traditional gradual changes in fundamentals. We propose a novel dual-vacancy model that rationalizes this recent puzzling behavior, by acknowledging that not all vacancies are made equal—when firms post a vacancy they can fill it with an unemployed worker or they can fill it with an already employed worker—and by assuming that there are two separate search and matching processes, one for unemployed workers and another for the employed workers. By analyzing ...
Working Paper
Wage Setting Under Targeted Search
When setting initial compensation, some firms set a fixed, non-negotiable wage while others bargain. In this paper we propose a parsimonious search and matching model with two sided heterogeneity, where the choice of wage-settingprotocol, wages, search intensity, and degree of randomness in matching are endogenous. We find that posting and bargaining coexist as wage-setting protocols if there is sufficient heterogeneity in match quality, search costs, or market tightness and that labor market tightness and relative costs of search play a key role in the optimal choice of the wage-setting ...
Working Paper
The Dual Beveridge Curve
When firms decide to post a vacancy they can hire from the pool of unemployed workers or they can poach a worker from another firm. In this paper we show that if there are two different matching processes, one for unemployed workers and another one for job-to-job transitions, then implications for the Beveridge curve are potentially very different, influencing the effects of monetary policy on unemployment. We show that over the years the hiring process and how job postings are used as an input into this process have changed dramatically.
Working Paper
Marriage Market Sorting in the U.S.
We examine shifts in the U.S. marriage market, assessing how online dating, demographic changes and evolving societal norms influence mate choice and broader sorting trends. Using a targeted search model, we analyze mate selection based on factors such as education, age, race, income and skill. Intriguingly, despite the rise of online dating, preferences, mate choice and overall sorting patterns showed negligible change from 2008 to 2021. However, a longer historical view from 1960 to 2020 reveals a trend toward preferences for similarity, particularly concerning income, education and skills. ...
Working Paper
The Dual Beveridge Curve
This study introduces a dual vacancy model to explain the recent anomalous behavior of the Beveridge curve. The model proposes that job vacancies are partitioned into two categories, one for the unemployed and the other for job-to-job transitions, and that they function in separate markets. We estimate the monthly numbers of both job vacancy types for the U.S. economy and its subsectors starting from 2000 and find a significant surge in poaching vacancies in the mid-2010s. Our analysis indicates that the dual vacancy model provides a better fit to the data than traditional models. These ...
Journal Article
Cost of decisionmaking influences individual selections
Market prices are often driven by choices later viewed as mistakes. Waves of optimism or pessimism sometimes dramatically move prices; a burst bubble of euphoria can bring significant macroeconomic consequences. ; A sudden change of sentiment may occur when a large number of stock market professionals consistently err by holding on to stocks for too long when they should sell, or by selling equities too quickly when they should be holding on to them. Yet, these individuals are specialists with every incentive to evaluate stocks correctly. ; Behavioral experiments show that in laboratory ...