Essays on Wages and Wage Inequality over the Business Cycle

Th is dissertation is com posed of two ch apters th at exam in e th e cyclical beh avior of real w ages an d w age differen tials. In th e first ch apter, I develop a m odel of optim al labor con tractin g in a stoch astic environment to an alyze th e dyn am ic beh avior of w ages an d th e education -based skill-prem ium in con jun ction w ith oth er m acroeconomic aggregates. Th e secon d ch apter, coauth ored with Ch ris Otrok, is an em pirical an alysis of th e cyclical properties of real w ages usin g a Bayesian approach .

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