Arbeitspapier
Unemployment cycles
The labor market by itself can create cyclical outcomes, even in the absence of exogenous shocks. We propose a theory that shows that the search behavior of the employed has profound aggregate implications for the unemployed. There is a strategic complementarity between active on-the-job search and vacancy posting by firms: active search changes the number of searchers and the duration of a job, and in the presence of sorting, it improves the quality of the pool of searchers. More vacancy posting in turn makes costly on-the-job search more attractive, a self-fulfilling belief. The absence of on-the-job search discourages vacancy posting, rendering costly on-the-job search unattractive. This model of multiple equilibria can account for large fluctuations in vacancies, unemployment, and job-to-job transitions; it provides a rationale for the Jobless Recovery through a novel channel of the employed searchers crowding out the unemployed; and it gives rise to a shift in the Beveridge Curve (the unemployment-vacancy locus). Each of these phenomena is matched in the data.
- Language
-
Englisch
- Bibliographic citation
-
Series: IFS Working Papers ; No. W15/26
- Classification
-
Wirtschaft
- Subject
-
On-the-job search
strategic complementarity
unemployment cycles
sorting
mis-match
job-to-job flows
Jobless Recovery
- Event
-
Geistige Schöpfung
- (who)
-
Eeckhout, Jan
Lindenlaub, Ilse
- Event
-
Veröffentlichung
- (who)
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Institute for Fiscal Studies (IFS)
- (where)
-
London
- (when)
-
2015
- DOI
-
doi:10.1920/wp.ifs.2015.1526
- Handle
- Last update
-
10.03.2025, 11:41 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Eeckhout, Jan
- Lindenlaub, Ilse
- Institute for Fiscal Studies (IFS)
Time of origin
- 2015
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