We document and discuss a dramatic change in the cyclical behavior of aggregate skilled hours since the mid‐1980s. Using CPS data for 1979:1–2003:4, we find that the volatility of skilled hours relative to the volatility of GDP has nearly tripled since 1984. In contrast, the cyclical properties of unskilled hours have remained essentially unchanged. We evaluate whether a simple supply/demand model for skilled and unskilled labor with capital‐skill complementarity in production can help explain this stylized fact. Our model accounts for about 60% of the observed increase in the relative volatility of skilled labor.

We estimate the e¤ect of household appliance ownership on the labor force participation rate of married women using micro-level data from the 1960 and 1970 U.S. Censuses. In order to identify the causal e¤ect of home appliance ownership on married women's labor force participation rates, our empirical strategy exploits both time-series and cross-sectional variation in these two variables. To control for endogeneity, we instrument a married woman's ownership of an appliance by the average ownership rate for that appliance among single women living in the same U.S. state. Single women's labor force participation rates did not increase between 1960 and 1970. By our estimation, the di¤usion of household appliances accounts for about forty percent of the observed increase in married women's labor force participation rates during the 1960's.

A dynamic general equilibrium model of migration is developed to explain the main features of geographic mobility of workers across U.S. states. Models of net flows only cannot explain the positive cross-sectional correlation between gross inflow and outflow rates. The dynamics of migration flows is driven by local productivity shocks and idiosyncratic shocks to the match between a worker and a location. The latter is revealed only after migration has occurred. Thus, migrating workers have a higher propensity to migrate again than incumbent workers and locations that attract high numbers of migrants also tend to experience high outflow rates.

In this paper I suggest a unified explanation for two puzzles in the inventory literature: first, estimates of inventory speeds of adjustment in aggregate data are very small relative to the apparent rapid reaction of stocks to unanticipated variations in sales. Second, estimates of inventory speeds of adjustment in firm-level data are significantly higher than in aggregate data. The paper develops a multisector model where inventories are held to avoid stockouts, and price markups vary along the business cycle. The omission of countercyclical markup variations from inventory targets introduces a downward bias in estimates of adjustment speeds obtained from partial adjustment models. When the cyclicality of markups differs across sectors, this downward bias is shown to be more severe with aggregate rather than firm-level data. Similar results apply not only to inventories, but also to labor and prices. Montercarlo simulations of a calibrated version of the model suggest that these biases are quantitatively significant.