Unemployment and Endogenous Reallocation over the Business Cycle

Arbeitspapier

This paper studies the extent to which the cyclicality of gross and net occupational mobility shapes that of aggregate unemployment and its duration distribution. Using the SIPP, we document the relation between workers’ (gross and net) occupational mobility and unemployment duration over the long run and business cycle. To interpret this evidence, we develop an analytically and computationally tractable stochastic equilibrium model with heterogenous agents and occupations as well as aggregate uncertainty. The model is quantitatively consistent with several important features of the US labor market: procyclical gross and countercyclical net occupational mobility, the large volatility of unemployment and the cyclical properties of the unemployment duration distribution, among others. Our analysis shows that “excess” occupational mobility due to workers’ changing career prospects interacts with aggregate conditions to drive fluctuations of aggregate unemployment and its duration distribution.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 8288

Classification and Topics

• Classification: Wirtschaft ; Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity ; Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data) ; Job, Occupational, and Intergenerational Mobility; Promotion ; Labor Turnover; Vacancies; Layoffs ; Unemployment: Models, Duration, Incidence, and Job Search
• Subject: unemployment ; business cycle ; rest ; search ; occupational mobility

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Carrillo-Tudela, Carlos ; Visschers, Ludo
• Event: Veröffentlichung
• (who): Center for Economic Studies and Ifo Institute (CESifo)
• (where): Munich
• (when): 2020

Further information

• Handle: http://hdl.handle.net/10419/219106
• Last update: 10.03.2025, 11:44 AM CET