This paper aims to quantify the mechanisms and the extent to which parental wage risk passes through to children’s skill development.

We study a model where Becker meets Diamond-Mortensen-Pissarides and Bewley-Huggett-Aiyagari.

We document a robust set of facts on spatial differences in unemployment, vacancies, and job filling, finding, and separation rates, and develop a theory of the geography of labor market dynamics.

We

The introduction of recall options provides a novel mechanism that reconciles the puzzle of a positive comovement between separation and job finding rate over the life cycle.

The introduction of recall options provides a novel mechanism that reconciles the puzzle of a positive comovement between separation and job finding rate over the life cycle.