Working Papers

• The Worker and Firm Origins of Life-Cycle Wage Inequality (with Xincheng Qiu and Runling Wu) May 2026·Working Paper
  Abstract Paper Cite

  Wage inequality widens substantially over the life cycle. We decompose this widening into worker and firm heterogeneity in returns to experience and dynamic sorting. We extend the AKM model to allow wage growth to differ across workers and firms, and develop a two-way clustering algorithm. Using matched employer-employee data from Italy, we document substantial heterogeneity in both worker and firm growth components. Worker growth accounts for two-thirds of the rise in life-cycle wage inequality, while firm growth accounts for the remaining third. Workers with more accumulated skills increasingly sort into high-paying firms over the life cycle.

• The Search Costs of Inflation (with Laura Pilossoph and Jane Ryngaert) December 2025·Working Paper
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  What are the costs of inflation in the labor market? When wages are set nominally, inflation leads to reduced purchasing power, which prompts workers to search for other jobs to regain it; this search is costly. We quantify these costs in a model of on-the-job search with nominal rigidities, where search effort responds endogenously to inflation. Relative to a flexible wage counterfactual, inflation erodes the value of a match to a worker through real wage losses and larger search costs. The real wage loss is absorbed as a benefit to firms, whereas the cost of search is a net aggregate cost of inflation.

• Intergenerational Mobility in Welfare: Wages and Amenities (with Natalia Khorunzhina and Runling Wu) December 2025·Working Paper
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  Measures of intergenerational mobility primarily focus on earnings and often overlook substantial heterogeneity in job amenities. We propose a novel measure of intergenerational welfare mobility, “value-value” slope, including both pecuniary and non-pecuniary value of a job. We apply a revealed preference approach to construct common rankings of jobs based on worker flows. Using Danish administrative data, we document that there is 31% more intergenerational mobility than earnings-based mobility measures alone would suggest: the value-value slope is 0.105 and the wage-premia slope is 0.151.

• Text Sentiment about Monetary Policy (with Hie Joo Ahn, Thomas R. Cook, Taeyoung Doh, and Elias Kastriti) November 2025·Working Paper
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  This paper uses text data from FOMC meeting transcripts to estimate the reference levels of full employment, inflation, and financial conditions perceived by voting members, and to uncover time variation in the Taylor rule parameters. We construct topic dictionaries on economic slack, inflation, and financial markets, and infer reference levels from members’ sentiment using a state-space model.

“The Micro and Macro Perspective of the Labor Market” Reading Group

Runling Wu and I co-organize the “Micro and Macro Perspective of the Labor Market” Virtual Reading Group at Duke. An archive can be found here.

Please contact labor.public@gmail.com if you are interested in participating. Meetings are on Saturdays at 11 AM (ET) via Zoom.

Contact

Email: jesse.wedewer@duke.edu
Department of Economics, Duke University • Durham, NC