Dear all, we want to invite you to our next ECON Theory and Policy Seminar talks in January 2023: Thursday, January 12, 2023 form 5:00-6:30pm (Seminarroom DB04 yellow, Freihaus Building, yellow area, 4th floor) Falling Behind: Has Rising Inequality Fueled the American Dept Boom? Fabian Greimel (Univ. of Amsterdam) https://www.greimel.eu/ We evaluate the hypothesis that rising inequality was a causal source of the US household debt boom since 1980.The mechanism builds on the observation that households care about their social status. To keep up with the ever richer Joneses, the middle class substitutes status-enhancing houses for status-neutral consumption. These houses are mortgage-financed, creating a debt boom across the income distribution. Using astylized model we show analytically that aggregate debt increases as top incomes rise. In a quantitative general equilibrium model we show that Keeping up with the Joneses and rising income inequality generate 60% of the observed boom in mortgage debt and 50% of the house price boom. Finally, we provide novel empirical evidence on the relationship between top incomes and household debt. Mortgage debt rose substantially more in US states that experienced stronger growth in top incomes. There is no such relationship between top incomes and non-mortgage debt. These findings support to the importance of the comparisons channel. and Friday, January 13, 2023 from 12:00-1:00pm (Seminarroom DB10 yellow, Freihaus Building, yellow area, 10th floor) Matching Through Search Channels Leo Kaas (Goethe University Frankfurt) https://sites.google.com/site/leojkaas/?pli=1 Firms and workers predominately match via job postings, networks of personal contacts or the public employment agency, all of which help to ameliorate search and information frictions in the labor market. In this paper we investigate the extent to which these search channels have differential effects on labor market outcomes. Using novel survey-administrative data for Germany we find that (i) low-wage firms and low-wage workers are more likely to find matches via networks or the public agency, while high-wage firms and high-wage workers succeed more often via job postings; (ii) networks and job postings help to poach and to attract high-wage workers, differentially across firm wage ranks. To evaluate the implications of our findings for labor market sorting, worker turnover and wage inequality, we structurally estimate an equilibrium job ladder model featuring two-sided heterogeneity and multiple search channels. Our results point at an important role of networks for labor market sorting, while the public employment agency has only a modest impact on unemployment, even for low-productivity workers. Further Events: https://www.econ.tuwien.ac.at/index.html#events Best regards, Julia Hutter for Alexia Fürnkranz-Prskawetz Julia Hutter TU Wien Institute of Statistics and Mathematical Methods in Economics Economics E105-3 Phone: +43-1-58801x10531 E-Mail: julia.hutter@tuwien.ac.at<mailto:julia.hutter@tuwien.ac.at>