Comment on the alpha beta gamma of the labor market

Abstract

This is an excellent paper that illustrates a recent line of work that I think is both very exciting and very promising. It makes three important contributions. First, it documents tremendous heterogeneity in lifetime labor market histories across workers. Second, it shows that introducing novel sources of heterogeneity into search models can account for this heterogeneity. Third, it shows that the resulting heterogeneous agent search model provides important and novel insights into many long-standing and important issues. This paper represents an important first step in the broader agenda of building models that can account for the important dimensions of heterogeneity found in the data.