My research examines the interaction between wealth inequality and labor market outcomes, and how this interaction matters over and across business cycles. I newly account for the fact that unemployed workers' job search is a function of their wealth level, thereby introducing a feedback loop between wealth and labor market outcomes. This work contributes to frontier research in heterogeneous-agent macroeconomics by embedding search theory into quantitative macroeconomic frameworks. It also informs policy debates by assessing how social safety nets should be designed when inequality shapes labor market behaviour and outcomes. Addressing these questions requires solving highly complex heterogeneous-agent models that combine labor-market frictions, rich heterogeneity, and aggregate shocks. Below, I outline two related projects. Project 1. Wealth Sorting and Cyclical Employment Risk. I explore how wealth shape workers’ job search decisions. I show theoretically that wealth-poor unemployed workers sort into relatively lower wage and lower security jobs, if these jobs offer a relatively higher job finding probability. Job search thus provides an insurance mechanism for liquidity constrained and risk-averse unemployed workers. I then quantify this mechanism in a rich quantitative framework in which wealth accumulation and income inequality depend on a workers’ job when employed, which itself is endogenous to workers’ wealth when unemployed. I show that the sorting mechanism generates a poverty trap: poorer workers place greater value on job finding probabilities and therefore accept lower-wage, higher-risk jobs, which in turn raises their likelihood of remaining poor in the future. Project 2. Macro Poverty. Who are the poor, and does poverty systematically affect labor market outcomes? We first document new facts on poverty and its relationship with labor market flows, participation, and human capital accumulation. We then develop a quantitative model capturing the interaction between poverty, human capital dynamics, and labor market frictions over the business cycle. The framework allows us to quantify the welfare costs of poverty and evaluate how alternative social safety net policies mitigate these costs from a social welfare perspective.