@techreport{NBERw15166,
 title = "Heterogeneity and Cyclical Unemployment",
 author = "Mark Bils and Yongsung Chang and Sun-Bin Kim",
 institution = "National Bureau of Economic Research",
 type = "Working Paper",
 series = "Working Paper Series",
 number = "15166",
 year = "2009",
 month = "July",
 URL = "http://www.nber.org/papers/w15166",
 abstract = {We model worker heterogeneity in the rents from being employed in a Diamond-Mortensen-Pissarides model of matching and unemployment. We show that heterogeneity, reflecting differences in match quality and worker assets, reduces the extent of fluctuations in separations and unemployment. We find that the model faces a trade-off--it cannot produce both realistic dispersion in wage growth across workers and realistic cyclical fluctuations in unemployment.},
}