Essays in macroeconomics

In this dissertation I study three different aspects of the macroeconomy. The first two chapters are empirical investigations into the effect of education on economic growth and inequality across countries, and the evolution of income inequality in the US over the past two decades. The third chapter is a theoretical study of firms' hiring decisions and their implications for business cycle fluctuations in employment.; In the first chapter, which is based on joint work with Coen Teulings, we argue that a higher average education level in a country decreases the return to schooling by a general equilibrium effect. We estimate this effect and use it to calculate the return to schooling from cross-country inequality data. The private return to schooling estimated in this manner is consistent with evidence from microdata. We also estimate the social return to education from GDP data and find that in the short run it is close to the private return, but that there are strong positive externalities in the long run.; In the second chapter, based on joint work with Giorgio Primiceri, we use microdata on income and consumption to estimate the contribution of transitory and permanent, idiosyncratic and aggregate changes in income to total inequality. Our model allows for the possibility that consumers are able to partly insure against permanent shocks and we estimate this kind of insurance to be important. That leads us to conclude that the increase in income inequality in the 1980s was mainly permanent, even though consumption inequality did not increase much over the same period.; The third chapter addresses the question why employment is slow to recover at the end of a recession (jobless recovery). I argue that when firms face increased demand for their products, they initially reallocate workers within the firm to focus on producing output while postponing 'organizational' tasks like machine maintenance or employee training. Because postponing organizational tasks is initially costless but grows costly over time, profit-maximizing firms delay hiring new workers in response to an increase in demand or productivity. Consistent with the data, the model predicts that jobless recoveries follow long expansions.