Wealth Inequality and Labor Mobility: The Job Trap (JMP)

Abstract. This paper studies how wealth affects workers’ ability to move to higher-paying jobs. Using microdata from the SIPP, I compare similar workers and find that those with higher liquid wealth are 35\% more likely to change jobs than workers with no savings. To explain this pattern, I develop a job ladder model with incomplete markets, risk-averse workers, and wage posting, where firms learn about match quality over time. Because firms gradually screen out workers in bad matches, changing jobs restarts the learning process and raises the risk of job loss. Workers with no liquidity, unable to insure against unemployment risk, prioritize job security over job mobility and remain trapped in low-paying jobs. This mechanism accounts for nearly 60\% of the observed wealth gap in job mobility, and shutting it down yields both higher aggregate mobility and lower income inequality. More generous unemployment insurance offers a pathway out of the job trap: the optimal policy is hump-shaped in income and extends benefit duration to two years, raising welfare by over 5\% while reducing inequality at no additional fiscal cost. 

• Awards: Econ JM Best Paper Award by EEA and UniCredit , AEA Summer Economics Fellowship, GSAS Dissertation Fellowship, Summer Dissertation Fellowship

• Federal Reserve Bank of Philadelphia, Dallas Fed Women in Central Banking Workshop, Search and Matching (SaM) annual conference, Midwest Macro, CSWEP session at WEAI, CEBRA annual meeting, Federal Reserve Bank of Kansas City, Green Line Macro Meeting, Boston College, Aarhus Workshop on Labor Economics, Southern Economics Association Annual Meeting

Love and the (Superstar) City: Housing Costs and the Geography of Marriage, with Gabrielle Penrose 

Abstract.  We provide new evidence on the drivers of assortative marriage in the United States. Using four decades of microdata from the American Community Survey, we document substantial spatial variation in assortative mating over income: it is strongest in areas with higher housing costs and a larger share of college-educated workers. To interpret these patterns, we develop a spatial marriage-market model that embeds a search-and-matching framework within a superstar-city environment, characterized by heterogeneous housing supply elasticities and returns to productivity. The model replicates observed wage and housing price differentials across cities and generates spatial and marital sorting patterns consistent with the data. In equilibrium, skilled workers endogenously sort into more productive, high-cost cities, where they are more likely to meet and marry other high earners. Preliminary quantitative results suggest that assortative mating on income is substantially stronger in superstar cities than in the average metropolitan area.

• Boston College Applied Micro Brownbag Seminar

Parental Wealth and Early Labor Market Outcomes, by Holmberg, Simmons and Trapeznikova [slides]; 

prepared for the 4th DC Search and Matching Workshop, April 2025