TY  - JOUR
AU  - Bils,Mark
AU  - Chang,Yongsung
AU  - Kim,Sun-Bin
TI  - Heterogeneity and Cyclical Unemployment
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 15166
PY  - 2009
Y2  - July 2009
UR  - http://www.nber.org/papers/w15166
L1  - http://www.nber.org/papers/w15166.pdf
N1  - Author contact info:
Mark Bils
Department of Economics
University of Rochester
Rochester, NY 14627
Tel: 585/275-0488
Fax: 585/256-2309
E-Mail: bils@troi.cc.rochester.edu

Yongsung Chang
Department of Economics
University of Rochester
Rochester, NY 14627
Tel: 1-585-275-1871
Fax: 1-585-256-2309
E-Mail: ychang14@mail.rochester.edu

Sun-Bin Kim
Department of Economics
Yonsei University
134 Shinchon-dong Seodaemoon-gu
Seoul Korea, 120-749
Tel: 82-2-2123-2467
E-Mail: sunbin.kim@yonsei.ac.kr
AB  - 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.
ER  -