Business cycle asymmetries and the labor market

Arbeitspapier

This paper shows that a search and matching model with idiosyncratic training cost shocks can explain the asymmetric movement of the job-finding rate over the business cycle and the decline of matching efficiency in recessions. Large negative aggregate shocks move the hiring cutoff into a part of the training cost distribution with higher density. The position of the hiring cutoff in the distribution is disciplined by the empirical elasticity of the job-finding rate with respect to market tightness. Our model explains a large fraction of the matching efficiency decline during the Great Recession and generates state-dependent effects of policy interventions.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: FAU Discussion Papers in Economics ; No. 03/2022

Classification and Topics

• Classification: Wirtschaft ; Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity ; Business Fluctuations; Cycles ; Labor Turnover; Vacancies; Layoffs ; Unemployment: Models, Duration, Incidence, and Job Search
• Subject: Business cycle asymmetries ; matching function ; Beveridge curve,job-finding rate ; unemployment ; effectiveness of policy

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Kohlbrecher, Britta ; Merkl, Christian
• Event: Veröffentlichung
• (who): Friedrich-Alexander-Universität Erlangen-Nürnberg, Institute for Economics
• (where): Nürnberg
• (when): 2022

Further information

• Handle: http://hdl.handle.net/10419/253541
• Last update: 10.03.2025, 11:43 AM CET