Search Results
Working Paper
Unemployment Paths in a Pandemic Economy
The COVID-19 pandemic has upended the U.S. economy and labor market. We assess the initial spike in unemployment due to the virus response and possible paths for the official unemployment rate through 2021. Substantial uncertainty surrounds the path for measured unemployment, depending on the path of the virus and containment measures and their impact on reported job search activity. We assess potential unemployment paths based on historical patterns of monthly flows in and out of unemployment, adjusted for unique features of the virus economy. The possible paths vary widely, but absent ...
Working Paper
The Economics of Internal Migration: Advances and Policy Questions
We review developments in research on within-country migration, focusing on internal migration in the U.S. We begin by describing approaches to modelling individuals' migration decisions and equilibrium outcomes across local areas. Next, we summarize evidence regarding the impact of migration on individuals' outcomes, implications of migration for local labor market adjustment, and interactions between migration and housing markets. Finally, we discuss evidence on the efficacy of policies aimed at encouraging migration and conclude by highlighting important unanswered questions that are ...
Working Paper
Approximating Multisector New Keynesian Models
We show that a calibrated three-sector model with a suitably chosen distribution of price stickiness can closely approximate the dynamic properties of New Keynesian models with a much larger number of sectors. The parameters of the approximate three-sector distribution are such that both the approximate and the original distributions share the same (i) average frequency of price changes, (ii) cross-sectional average of durations of price spells, (iii) cross-sectional standard deviation of durations of price spells, (iv) the cross-sectional skewness of durations of price spells, and (v) ...
Working Paper
Unemployment Rate Benchmarks
This paper discusses various concepts of unemployment rate benchmarks that are frequently used by policymakers for assessing the current state of the economy as it relates to the pursuit of both price stability and maximum employment. In particular, we propose two broad categories of unemployment rate benchmarks: (1) a longer-run unemployment rate expected to prevail after adjusting to business cycle shocks and (2) a stable-price unemployment rate tied to inflationary pressures. We describes how various existing measures used as benchmark rates fit within this taxonomy with the goal of ...
Working Paper
Search with wage posting under sticky prices
Journal Article
Why Is Wage Growth So Low?
Real wage growth has been low in recent years despite continued improvement in the labor market. I examine the interaction between productivity growth and unemployment and show that low productivity growth largely accounts for the current low wage growth. If productivity growth were to pick up, the current low unemployment rate would likely strengthen the positive relationship between productivity growth and wage growth.
Working Paper
Vacancy Chains
Replacement hiring—recruitment that seeks to replace positions vacated by workers who quit—plays a central role in establishment dynamics. We document this phenomenon using rich microdata on U.S. establishments, which frequently report no net change in their employment, often for years at a time, despite facing substantial gross turnover in the form of quits. We devise a tractable model in which replacement hiring is driven by a novel structure of frictions, combining firm dynamics, on-the-job search, and investments into job creation that are sunk at the point of replacement. A key ...
Report
The Spread of COVID-19 and the BCG Vaccine: A Natural Experiment in Reunified Germany
As COVID-19 has spread across the globe, several observers noticed that countries still administering an old vaccine against tuberculosis—the BCG vaccine—have had fewer COVID-19 cases and deaths per capita in the early stages of the outbreak. This paper uses a geographic regression discontinuity analysis to study whether and how COVID-19 prevalence changes discontinuously at the old border between West Germany and East Germany. The border used to separate two countries with very different vaccination policies during the Cold War era. We provide formal evidence that there is indeed a ...
Report
Labor Market Dynamics and Development
We build a dataset of harmonized rotating panel labor force surveys covering 42 countries across a wide range of development and document three new empirical findings on labor market dynamics. First, labor market flows (job-finding rates, employment-exit rates, and job-to-job transition rates) are two to three times higher in the poorest as compared with the richest countries. Second, employment hazards in poorer countries decline more sharply with tenure; much of their high turnover can be attributed to high separation rates among workers with low tenure. Third, wage-tenure profiles are much ...
Journal Article
How the Pandemic Influenced Trends in Domestic Migration across U.S. Urban Areas
Prior to the COVID-19 pandemic, net domestic migration in the United States was generally increasing in smaller urban areas while declining in the largest urban areas; as people sought to mitigate exposure to COVID-19 and avoid stricter lockdown measures, the pandemic may have accelerated this trend. Changes in domestic migration trends may influence the longer-term growth prospects of places, but investigating recent trends in domestic migration can be challenging because data from official government sources are released with a long lag.Jason P. Brown and Colton Tousey overcome this lag by ...