Modeling Migration-Induced Unemployment

This paper explains why a wave of in-migration reduces the employment rate of local workers, and why this reduction is larger in bad times. Yet, when the labor market is inefficiently tight, in-migration improves local welfare because it aids firms in recruiting.

December 2024 · Pascal Michaillat

A Macroeconomic Approach to Optimal Unemployment Insurance: Applications

This paper explores how the optimal generosity of unemployment insurance varies over the business cycle in the United States. It finds that the optimal replacement rate is countercyclical, just like the actual replacement rate.

May 2018 · Camille Landais, Pascal Michaillat, Emmanuel Saez

Aggregate Demand, Idle Time, and Unemployment

This paper develops a model of unemployment fluctuations. The innovation is to represent the labor and product markets with a matching structure. The model simultaneously features Keynesian unemployment, classical unemployment, and frictional unemployment.

May 2015 · Pascal Michaillat, Emmanuel Saez

Do Matching Frictions Explain Unemployment? Not in Bad Times

This paper proposes a matching model of the labor market with job rationing: unemployment does not disappear in the absence of matching frictions. In recessions, job rationing drives the rise of unemployment, whereas matching frictions contribute little to it.

June 2012 · Pascal Michaillat