Why Are Immigrants Always Accused of Stealing People's Jobs?

This paper explains why a wave of immigration reduces the employment rate of native workers, and why this reduction is larger in bad times. Yet, immigration improves native welfare when the labor market is inefficiently tight, because it helps firms to recruit.

March 2023 · Pascal Michaillat

u* = √uv

This paper shows that under simple but realistic assumptions, the efficient unemployment rate u* is the geometric average of the unemployment and vacancy rates. In the United States, 1930–2022, u* is stable and averages 4.1%.

January 2023 · Pascal Michaillat, Emmanuel Saez

Unemployment

This graduate course presents various matching models of unemployment. It uses them to study unemployment fluctuations, job rationing, unemployment gap, and labor market policies—minimum wage, payroll tax, public employment, and unemployment insurance.

March 2022 · Pascal Michaillat

Beveridgean Unemployment Gap

This paper develops a sufficient-statistic formula for the unemployment gap based on the Beveridge curve. The formula features the Beveridge elasticity, unemployment cost, and recruiting cost. In the United States the unemployment gap is generally positive and is countercyclical.

December 2021 · Pascal Michaillat, Emmanuel Saez

Intermediate Macroeconomics

This undergraduate course introduces macroeconomic concepts—such as GDP and inflation—and covers the IS-LM model of business cycles, matching model of unemployment, Phillips curve, Malthusian model of growth, and Solowian model of growth.

December 2018 · Pascal Michaillat

A Macroeconomic Approach to Optimal Unemployment Insurance: Applications

This paper explores how the optimal replacement rate of unemployment insurance varies over the business cycle in the United States. It finds that the optimal replacement rate is countercyclical, just like the actual replacement rate.

May 2018 · Camille Landais, Pascal Michaillat, Emmanuel Saez

A Macroeconomic Approach to Optimal Unemployment Insurance: Theory

This paper develops a theory of optimal unemployment insurance in matching models. It derives a sufficient-statistic formula for optimal unemployment insurance, which is useful to determine the optimal cyclicality of unemployment insurance.

May 2018 · Camille Landais, Pascal Michaillat, Emmanuel Saez

A Theory of Countercyclical Government Multiplier

This paper develops a New Keynesian model in which the government multiplier doubles when the unemployment rate rises from 5% to 8%. The multiplier is so countercyclical because in bad times, on the labor market, job rationing dwarfes matching frictions.

January 2014 · Pascal Michaillat

Do Matching Frictions Explain Unemployment? Not in Bad Times

This paper proposes a matching model of the labor market with job rationing: unemployment does not disappear in the absence of matching frictions. In recessions, job rationing drives the rise in unemployment, whereas matching frictions contribute little to unemployment.

June 2012 · Pascal Michaillat