| The three essays presented in this dissertation explore problematics in Macroeconomics of Labor Markets. The first chapter, co-authored with Mathieu Taschereau-Dumouchel, studies the optimal design of labor market policies in an environment with informational and search frictions. In the second and third chapters, I turn to the study of labor market dynamics. I build a tractable dynamic search model in the second chapter that I use as a general framework to study firm dynamics and labor market flows over the business cycle. The third chapter applies this framework to investigate the role of uncertainty in explaining some specific patterns in unemployment and productivity observed during the 2007--2010 recession.;In the first chapter, we study the design of optimal policies in a frictional model of the labor market with adverse selection. Heterogeneous, risk-averse agents look for a job in a labor market characterized by an aggregate matching technology. Firms search for workers but cannot observe their productivities. Our mechanism design approach shows that the constrained optimal allocation can be implemented by policy instruments such as a non-linear tax on wages, a non-constant unemployment insurance and firm subsidies. We calibrate our model to the US economy and characterize the welfare gains from the optimal policy and its effects on output, employment and the wage distribution. Our findings suggest that the optimal policy under a utilitarian government features a negative income tax, a more generous unemployment insurance for low-skilled workers and higher marginal tax rates, which results in a higher participation in the labor market and a lower unemployment rate. We also show that a government with more egalitarian preferences would favor policies with more European characteristics: heavier taxation and more generous unemployment insurance, which result in a lower output and slightly higher unemployment rate.;The second and third chapters focus on the study of firm dynamics and labor market flows over the business cycle. In the second chapter, I develop a tractable dynamic search model of heterogeneous firms with decreasing returns to labor. The proposed model improves on the existing literature by introducing a specific structure for the labor market that allows for a full characterization of firm and aggregate dynamics. Thanks to its tractability, the model is able to provide a detailed description of labor market flows, firm life-cycle, and a rich pattern of interactions between firms of different sizes and productivities over the business cycle.;The third chapter applies this framework to investigate the role of uncertainty during the 2007--2010 recession. Some particular patterns that standard search models have difficulty explaining have indeed been observed during this recession: a large and persistent increase in unemployment and a sharp rise, above pre-recession levels, in labor productivity. In addition, these observations were accompanied by a significant increase in the dispersion of firm growth rates. In this chapter, I propose uncertainty shocks as a possible explanation. I show that an increase in the idiosyncratic uncertainty faced by firms leads to higher unemployment, larger measured productivity, and more dispersion in firm growth rates. A combination of aggregate productivity and uncertainty shocks is able to explain many of the patterns observed in the ongoing recession, including the joint dynamics of unemployment and productivity. In addition to these findings, the model performs well at explaining business cycle statistics in ordinary times and is able to reproduce a range of observations at the establishment and cross-sectional levels, such as the employment behavior of establishments. |
