Introduction

This monograph analyzes how unemployment and job search affect the distribution of labor earnings and contribute to inequality. Unemployment and job search generate inequality both through unequal time spent employed and through the unequal wage offers facing unemployed workers. This monograph studies the choices that workers make between earnings and unemployment, and calculates how much inequality this choice generates. It further studies the contribution of random outcomes to inequality and relates this inequality to the labor market assignment problem solved by search.