The Cyclicality of the Opportunity Cost of Employment
---- Acknowledgements -----
We are especially grateful to Bob Hall for many insightful discussions and for his generous comments at various stages of this project. This paper also benefited from conversations with Steve Davis, Peter Ganong, Erik Hurst, Greg Kaplan, Larry Katz, Pat Kehoe, Guido Lorenzoni, Giuseppe Moscarini, Casey Mulligan, Richard Rogerson, Rob Shimer, and Gianluca Violante. We also thank seminar participants at Brown, Chicago Booth, the Empirical Macroeconomics Workshop in New Orleans, the Federal Reserve Bank of Chicago, the Federal Reserve Bank of New York, the Federal Reserve Bank of Minneapolis, Harvard, LSE, the NBER EFG meeting, Northwestern, NYU, Princeton, the Tsinghua Workshop in Macroeconomics, UT Austin, Wharton, and Yale. Much of this paper was written while Gabriel Chodorow-Reich was visiting the Julis-Rabinowitz Center at Princeton University. Loukas Karabarbounis thanks Chicago Booth for summer financial support. The Appendix to this paper is available at the authors' webpages. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.