Business cycles, unemployment insurance, and the calibration of matching models
James Costain,Michael Reiter +1 more
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The authors theoretically and empirically document a puzzle that arises when an RBC economy with a job matching function is used to model unemployment, and show that either sticky wages or match-specific productivity shocks can improve the model's performance by making the firm's flow of surplus more procyclical.About:
This article is published in Journal of Economic Dynamics and Control.The article was published on 2008-04-01 and is currently open access. It has received 412 citations till now. The article focuses on the topics: Unemployment & Efficiency wage.read more
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The Cyclical Behavior of Equilibrium Unemployment and Vacancies Revisited
TL;DR: In this paper, the authors use data on the cost of vacancy creation and cyclicality of wages to identify the two key parameters of the model - the value of non-market activity and the bargaining weights.
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Search-Theoretic Models of the Labor Market: A Survey
TL;DR: The authors survey the literature on search-theoretic models of the labor market and show how this approach addresses many issues, including: Why workers sometimes choose to remain unemployed, what determines the lengths of employment and unemployment spells, how can there simultaneously exist unemployed workers and unfilled vacancies, how aggregate unemployment and vacancies, homogeneous workers earn different wages, what are the tradeoffs firms face from different wages and how do wages and turnover interact? What determines efficient turnover.
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The unemployment volatility puzzle: is wage stickiness the answer?
TL;DR: In this article, the authors discuss the failure of the canonical search and matching model to match the cyclical volatility in the job finding rate and show that job creation in the model is influenced by wages in new matches.
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Unemployment fluctuations with staggered nash wage bargaining
Mark Gertler,Antonella Trigari +1 more
TL;DR: In this paper, a tractable relation for wage dynamics that is a natural generalization of the period-by-period Nash bargaining outcome in the conventional formulation is presented, and a reasonable calibration of the model can account well for the cyclical behavior of wages and labor market activity observed in the data.
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Recessions and the Costs of Job Loss
Steven J. Davis,Till von Wachter +1 more
TL;DR: In this article, the authors developed new evidence on the cumulative earnings losses associated with job displacement, drawing on longitudinal Social Security records from 1974 to 2008, showing that men lose an average of 1.4 years of predisposition earnings if displaced in mass-layoff events that occur when the national unemployment rate is below 6 percent.
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Employment Efficiency and Sticky Wages: Evidence from Flows in the Labor Market
TL;DR: The authors consider three views of the labor market and show that the behavior of flows in the labour market strongly favors the third view, which is the one of flexible and flexible wages and the principle of bilateral efficiency.
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Comparative Analysis of Labour Market Outcomes: Lessons for the US from International Long-Run Evidence
TL;DR: The authors analyzed a 1960-96 panel of OECD countries to explain why the US has moved from relatively high to relatively low unemployment over the last three decades, finding that the interaction of macroeconomic and demographic shocks and changing labor market institutions is the most important factor explaining the shift in US relative unemployment.
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The consequences of rigid wages in search models
TL;DR: In this paper, the Mortensen-Pissarides search and matching model is modified to make the present value of wages unresponsive to current labor market conditions, which amplifies fluctuations in unemployment and vacancies by an order of magnitude.
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Fractionalization and the size of government
TL;DR: This paper studied the effect of voters with a group-based social conscience on the support for redistribution in a tax determination model. And they found support for the hypothesis that within race inequality increases redistribution while between race inequality decreases redistribution, even if a poor group forms a majority.
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Employment Efficiency and Sticky Wages: Evidence from Flows in the Labor Market
TL;DR: In this paper, the authors consider three views of the labor market and show that the behavior of flows in the labour market strongly favors the third view, i.e., wages are flexible and employment follows the principle of bilateral efficiency.
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