scholarly journals Marginal Jobs, Heterogeneous Firms, and Unemployment Flows

2013 ◽  
Vol 5 (1) ◽  
pp. 1-48 ◽  
Author(s):  
Michael W. L Elsby ◽  
Ryan Michaels
Keyword(s):  
Labor Market ◽  
Cross Section ◽  
Employment Growth ◽  
Heterogeneous Firms ◽  
Job Destruction ◽  
Worker Flows ◽  
Cyclical Fluctuations ◽  
Search And Matching Model ◽  
The Business Cycle ◽  
Aggregate Dynamics

This paper introduces a notion of firm size into a search and matching model with endogenous job destruction. The outcome is a rich, yet analytically tractable framework that can be used to analyze a broad set of features of both the cross-section and aggregate dynamics of the labor market. The model provides a coherent account of the distributions of employer size and employment growth across establishments, the amplitude and propagation of cyclical fluctuations in worker flows, the negative comovement of unemployment and vacancies, and the dynamics of the distribution of employer size over the business cycle. (JEL E24, E32, J63, J64)

scholarly journals Efficient Firm Dynamics in a Frictional Labor Market

2015 ◽  
Vol 105 (10) ◽  
pp. 3030-3060 ◽  
Author(s):  
Leo Kaas ◽  
Philipp Kircher
Keyword(s):  
Labor Market ◽  
Heterogeneous Firms ◽  
Firm Dynamics ◽  
Market Model ◽  
Job Flows ◽  
Bargaining Models ◽  
The Business Cycle ◽  
Market Variables ◽  
Aggregate Dynamics

We develop and analyze a labor market model in which heterogeneous firms operate under decreasing returns and compete for labor by posting long-term contracts. Firms achieve faster growth by offering higher lifetime wages, which allows them to fill vacancies with higher probability, consistent with recent empirical findings. The model also captures several other regularities about firm size, job flows, and pay, and generates sluggish aggregate dynamics of labor market variables. In contrast to existing bargaining models with large firms, efficiency obtains and the model allows a tractable characterization over the business cycle. (JEL E24, J64, L11)

scholarly journals The Determinants of Immigrant Self-Employment in Australia

2000 ◽  
Vol 34 (1) ◽  
pp. 183-214 ◽  
Author(s):  
Anh T. Le
Keyword(s):  
Labor Market ◽  
Cross Section ◽  
Employment Growth ◽  
Cohort Effect ◽  
Employment Outcomes ◽  
Foreign Born ◽  
Self Employment ◽  
Single Cross Section ◽  
Market Experience ◽  
Single Cross

This article applies both single cross-section and dual cross-section approaches to modeling the propensity to be self-employed among the foreign born in the Australian labor market. The results from a single cross-section regression indicate that educational attainment, Australian labor market experience, the availability of capital, marital status and job related characteristics are important influences on self-employment outcomes. The propensity to be self-employed among immigrants is shown to be enhanced by the existence of enclave markets. Ethnic enclaves created via a common language provide more relevant prospects for self-employment than does the concentration of immigrants by birthplace. However, enclave markets do not have a significant impact on the self-employment outcomes of the Australian-born children of immigrants. The dual cross-section approach shows that the cross-section self-employment growth among immigrants is predominantly an adjustment effect rather than a cohort effect.

scholarly journals Do Matching Frictions Explain Unemployment? Not in Bad Times

2012 ◽  
Vol 102 (4) ◽  
pp. 1721-1750 ◽  
Author(s):  
Pascal Michaillat
Keyword(s):  
Labor Market ◽  
Economic Equilibrium ◽  
Wage Rigidity ◽  
Search And Matching ◽  
Matching Model ◽  
Cyclical Fluctuations ◽  
Matching Frictions ◽  
Search And Matching Model ◽  
Marginal Returns

This paper proposes a search-and-matching model of unemployment in which jobs are rationed: the labor market does not clear in the absence of matching frictions. This job shortage arises in an economic equilibrium from the combination of some wage rigidity and diminishing marginal returns to labor. In recessions, job rationing is acute, driving the rise in unemployment, whereas matching frictions contribute little to unemployment. Intuitively in recessions, jobs are lacking, the labor market is slack, and recruiting is easy and inexpensive, so matching frictions do not matter much. In a calibrated model, cyclical fluctuations in the composition of unemployment are large.

scholarly journals Job Destruction and Propagation of Shocks

2000 ◽  
Vol 90 (3) ◽  
pp. 482-498 ◽  
Author(s):  
Wouter J den Haan ◽  
Garey Ramey ◽  
Joel Watson
Keyword(s):  
Labor Market ◽  
Flow Data ◽  
Job Destruction ◽  
Aggregate Shocks ◽  
Destruction Rate ◽  
Dynamic General Equilibrium Model ◽  
Capital Adjustment ◽  
Cyclical Fluctuations ◽  
Propagation Effects ◽  
Labor Market Matching

This paper considers propagation of aggregate shocks in a dynamic general-equilibrium model with labor-market matching and endogenous job destruction. Cyclical fluctuations in the job-destruction rate magnify the output effects of shocks, as well as making them much more persistent. Interactions between capital adjustment and the job-destruction rate play an important role in generating persistence. Propagation effects are shown to be quantitatively substantial when the model is calibrated using job-flow data. Incorporating costly capital adjustment leads to significantly greater propagation. (JEL E24, E32)

scholarly journals Gross Worker Flows over the Business Cycle

2017 ◽  
Vol 107 (11) ◽  
pp. 3447-3476 ◽  
Author(s):  
Per Krusell ◽  
Toshihiko Mukoyama ◽  
Richard Rogerson ◽  
Ayşegül Şahin
Keyword(s):  
Labor Market ◽  
Business Cycle ◽  
Labor Supply ◽  
Hybrid Model ◽  
Participation Rate ◽  
Worker Flows ◽  
Key Features ◽  
The Business Cycle ◽  
Parsimonious Model ◽  
Over Time

We build a hybrid model of the aggregate labor market that features both standard labor supply forces and frictions in order to study the cyclical properties of gross worker flows across the three labor market states: employment, unemployment, and nonparticipation. Our parsimonious model is able to capture the key features of the cyclical movements in gross worker flows. Despite the fact that the wage per efficiency unit is constant over time, intertemporal substitution plays an important role in shaping fluctuations in the participation rate. (JEL E24, E32, J22, J31, J64, J65)

scholarly journals Trade credit, trade income elasticity and the international transmission of shocks

2021 ◽  
Author(s):  
Anna Watson
Keyword(s):  
International Trade ◽  
Open Economy ◽  
Trade Credit ◽  
Income Elasticity ◽  
Heterogeneous Firms ◽  
Firm Level ◽  
Macroeconomic Shocks ◽  
Cyclical Fluctuations ◽  
Irish Data ◽  
The Impact

AbstractThe paper examines the impact of trade credit on cyclical fluctuations in international trade. It provides new empirical evidence based on firm-level UK and Irish data showing that exporters use trade credit more actively and intensively than non-exporters. The study introduces inter-firm lending into an open economy general equilibrium model with heterogeneous firms and endogenous entry into the exports market. It demonstrates that trade credit amplifies the impact of macroeconomic shocks on international trade both along the intensive and extensive margins and that it significantly contributes to the high trade income elasticity observed in the data.

scholarly journals Autonomes Fahren statt Stop and Go: Vorschläge zur effektiven Gestaltung der deutschen Kurzarbeit

2019 ◽  
Vol 68 (3) ◽  
pp. 252-260
Author(s):  
Almut Balleer ◽  
Britta Gehrke ◽  
Brigitte Hochmuth ◽  
Christian Merkl
Keyword(s):  
Labor Market ◽  
Business Cycle ◽  
Great Recession ◽  
Timely Manner ◽  
Rule Based ◽  
The Great Recession ◽  
Stop And Go ◽  
Time Work ◽  
The Business Cycle ◽  
Short Time

Abstract This article argues that short-time work stabilized employment in Germany substantially during the Great Recession in 2008/09. The labor market instrument acted in timely manner, as it was used in a rule-based fashion. In addition, discretionary extensions were effective due to their interaction with the business cycle. To ensure that short-time work will be effective in the future, this article proposes an automatic facilitation of the access to short-time work in severe recessions. This reduces the likelihood of a too extensive use at the wrong point in time as well as structural instead of cyclical interventions.

scholarly journals Asset Returns, the Business Cycle and the Labor Market

2013 ◽  
Vol 14 (3) ◽  
pp. 372-397 ◽  
Author(s):  
Burkhard Heer ◽  
Alfred Maußner
Keyword(s):  
Labor Market ◽  
Business Cycle ◽  
Equity Premium ◽  
Working Hours ◽  
New Keynesian ◽  
Monetary Shocks ◽  
Productivity Shocks ◽  
New Keynesian Models ◽  
The Business Cycle ◽  
Sticky Wages

Abstract We review the labor market implications of recent real-business cycle and New Keynesian models that successfully replicate the empirical equity premium. We document the fact that all models reviewed in this article that do not feature either sticky wages or immobile labor between two production sectors as in Boldrin et al. (2001) imply a negative correlation of working hours and output that is not observed empirically. Within the class of Neo-Keynesian models, sticky prices alone are demonstrated to be less successful than rigid nominal wages with respect to the modeling of the labor market stylized facts. In addition, monetary shocks in these models are required to be much more volatile than productivity shocks to match statistics from both the asset and labor market.

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