Search Results
Working Paper
Regional labor fluctuations: oil shocks, military spending, and other driving forces
We quantify the contribution of various driving forces to state-level movements in unemployment rates and employment growth from 1956 to 1992. Our story of regional fluctuations in the U.S. economy has a large cast of players -- including government contract awards and the basing of military personnel -- but oil price shocks have been the leading actor since 1973. Beyond the magnitude and abruptness of oil price movements, the explanation for their pronounced regional effects has three essential elements: (i) regions differ in industry mix, (ii) industries differ in sensitivity to movements ...
Working Paper
Sticky Wages on the Layoff Margin
We design and field an innovative survey of unemployment insurance (UI) recipients that yields new insights about wage stickiness on the layoff margin. Most UI recipients express a willingness to accept wage cuts of 5-10 percent to save their jobs, and one-third would accept a 25 percent cut. Yet worker-employer discussions about cuts in pay, benefits, or hours in lieu of layoffs are exceedingly rare. When asked why employers don’t raise the possibility of job-preserving pay cuts, four-in-ten UI recipients don’t know. Sixteen percent say cuts would undermine morale or lead the best ...
Working Paper
The establishment-level behavior of vacancies and hiring
The authors study vacancies, hires, and vacancy yields (success rate in generating hires) in the Job Openings and Labor Turnover Survey, a large representative sample of U.S. employers. The authors also develop a simple framework that identifies the monthly flow of new vacancies and the job-filling rate for vacant positions, the employer counterpart to the job-finding rate for unemployed workers. The job-filling rate moves counter to employment at the aggregate level but rises steeply with employer growth rates in the cross section. It falls with employer size, rises with the worker turnover ...
Working Paper
Borrowing costs and the demand for equity over the life cycle
We construct a life-cycle model that delivers realistic behavior for both equity holdings and borrowings. The key model ingredient is a wedge between the cost of borrowing and the risk-free investment return. Borrowing can either raise or lower equity demand, depending on the cost of borrowing. A borrowing rate equal to the expected return on equity ? which we show roughly matches the data ? minimizes the demand for equity. Alternative models with no borrowing or limited borrowing at the risk-free rate cannot simultaneously fit empirical evidence on borrowing and equity holdings.
Conference Paper
Business volatility, job destruction and unemployment
Unemployment inflows fell from 4 percent of employment per month in the early 1980s to 2 percent or less by the mid 1990s and thereafter. U.S. data also show a secular decline in firm-level employment volatility and the job destruction rate. We interpret this decline as a decrease in the intensity of idiosyncratic labor demand shocks, a key parameter in search and matching models of frictional unemployment. According to these models, a lower intensity of idiosyncratic demand shocks produces less job destruction, fewer workers flowing through the unemployment pool and less frictional ...
Working Paper
Reservation Wages Revisited: Empirics with the Canonical Model
Using innovative longitudinal data from a survey of unemployment insurance (UI) recipients, we test several implications of a canonical job search model for reservation wages during unemployment spells. First, consistent with the model, we find that reservation wages fall faster when UI benefit durations are shorter. However, workers set their initial reservation wages higher, and adjust them slower, relative to model predictions. Second, workers' expectations—elicited at the beginning of their unemployment spell—about how their reservation wage will evolve if they remain unemployed are ...
Working Paper
Remote Work Across Jobs, Companies and Space
The pandemic catalyzed an enduring shift to remote work. To measure this shift, we develop a large language model (LLM), fine tune and assess it using 30,000 human classifications, and apply it to nearly 600 million job vacancy postings across five English-speaking countries. Our model achieves a 98% classification accuracy, greatly outperforming dictionary-based approaches, and matching or surpassing the performance of frontier AI models at a fraction of the cost. From 2019 to 2026, the share of postings that indicate new employees can work remotely at least one day per week rose more than ...
Firms Expect Working from Home to Triple
The coronavirus and efforts to mitigate its impact are having a transformative impact on many aspects of economic life, intensifying trends like shopping online rather than visiting brick-and-mortar stores and increasing the incidence of working from home. Indeed, many tech giants have already made working from home a permanent option for employees.