Wealth accumulation, on-the-job search and inequality

Job Ladder and Wealth Dynamics in General Equilibrium

“…Recently, Cajner et al (2022) consider an incomplete-markets model with a life-cycle structure and search on-the-job, but matching rates are exogenous functions of age and wages are exogenously linked to productivity. Chaumont and Shi (2022) develop a directed search model with job ladders, savings and incomplete markets. Different from our paper, the interest rate is exogenous, workers do not choose search effort, job acceptance or job quitting, and there is no life cycle -ingredients that we consider essential for the micro and macro implications of economic policies.…”

“…Different from our paper, the interest rate is exogenous, workers do not choose search effort, job acceptance or job quitting, and there is no life cycle -ingredients that we consider essential for the micro and macro implications of economic policies. Griffy (2021) analyzes a similar model as Chaumont and Shi (2022), adding a life cycle and human capital accumulation, while keeping search effort and the interest rate exogenous. In ongoing work, Griffy and Rabinovich (2022) and Krusell et al (2019) study similar directedsearch job-ladder models with aggregate risk.…”

Housing Prices and Credit Constraints in Competitive Search

“…Equilibria in related models are typically computed by discretizing household choices and using value function iteration to solve the household's problem. This is the procedure used by Hedlund (2016b), Chaumont andShi (2022), andEeckhout andSepahsalari (2020), for instance. By contrast, our theoretical results allow us to apply the Endogenous Grid Method to the Euler equations of the households' problems, so we do not need to resort to discretization.…”

Search and the Sources of Life‐cycle Inequality

“…(2016b) builds on this model to include exogenous human capital growth in order to understand the effects of credit constraints on aggregate output. Two more papers that incorporate risk aversion into a directed search framework are Chaumont and Shi (2017) and Eeckhout and Sepahsalari (2018)). The former focuses on frictional inequality in a model without human capital, whereas the latter considers an environment with heterogeneous firm productivity, but neither on‐the‐job search nor human capital accumulation and focuses on determining optimal unemployment insurance.…”