This dissertation consists of three self-contained chapters. The common theme connecting these chapters is the focus on how the labor market affects inequality in the economy. The first chapter studies how changes in the unemployment insurance system impact labor market inequality in the presence of endogenous labor force participation. In the second chapter, biased labor market expectations discourages individual asset accumulation contributing to wealth inequality. Diverging supply of high-skilled workers influencing the firm distribution and fostering wage inequality
across Germany is the topic of the third chapter.
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