Working Papers


(This version: November, 2015)
We propose a theory based on the firm's hiring behavior that rationalizes the observed decline of callback rates for an interview, exit rates, and reemployment wages over unemployment duration. We build a directed search model with symmetric incomplete information on worker types and non-sequential search by firms. Sorting due to firms' screening of applicants in the past makes expected productivity fall with unemployment duration, which induces firms to rank applicants by duration. The labor market is non-segmented in equilibrium because firms find it optimal to attract all workers, which ensures that callback and exit rates both fall with duration. Furthermore, we conduct a numerical exercise to show that our model can replicate quite well the observed falling patterns, and that the effects of the firm's ranking decision can be sizable.

          (This version: June, 2015)

Evidence shows that a large number of new matches are short-lived in the U.S. This paper studies an economy with incomplete markets in which present and future unemployment risks are intertwined and risk-averse workers factor these risks in their job-search decisions, while also deciding their search intensity. In equilibrium, firms respond to workers' preferences by creating more jobs that are easier to get, but typically shorter-lived than the jobs created in a centralized economy where the planner can attenuate the consumption loss of the unemployed by making a resource redistribution compatible with search incentives. Therefore, the equilibrium worker turnover is inefficiently high. In addition to a publicly-provided insurance to cover the unemployment risks, we show that the implementation of the planner's solution requires to subsidize match formation through wages and a zero layoff tax.  According to our numerical experiments, worker turnover is too low in the U.S. economy because unemployment benefits are excessively high.


          (This version: Feb, 2016)

The length of new employment relationships is of first order importance for a number of questions in recent macro-labor research. We investigate it using data from the Survey of Income and Program Participation for the U.S. from 1996 onwards, and document that above two-fifths of newly employed workers fall into non-employment within a year. We also find that the transition rate from employment to non-employment within the first year varies significantly for different groups of the population, increases with the duration of the previous non-employment spell, shows an acyclical or weakly procyclical pattern and a much higher volatility than the unemployment rate. 

  • Unemployment Risks and  Intra-Household  Insurance  (coming soon!)
We study the constrained efficient intra-household insurance and what unemployment risks should be publicly insured in an economy with incomplete markets and intra-household risk sharing, where households are formed by a job-seeker and an employed spouse and differ by the productivity of the spouse. Unlike the spouse's total income, neither her productivity nor labor supply is observed. We characterize the directed search equilibrium, and show that the spouse's labor supply is negatively affected by unemployment benefits regardless of the search outcome of the worker in line with the empirical evidence. We show that the optimal unemployment benefits are contingent on the household's total income as it affects the trade-off between consumption-smoothing and job search incentives. We numerically explore the welfare gains of implementing a household-income-based unemployment insurance.

Work in Progress

  • Intermediation in the Housing Market
  • Effects of Switching Occupations along the Job Search

Published Papers


        Online Appendix