Arbeitspapier

Worker-Firm Screening and the Business Cycle

There has been a substantial body of work modeling the co-movement of employment, vacancies, and output over the business cycle. This paper builds on this literature, and informed by empirical investigation, models worker and firm search and hiring behavior in a manner consistent with recent micro-evidence. Consistent with empirical findings, for a given vacancy, a firm receives many applicants, and chooses their preferred candidate amongst the set. Similarly, workers in both unemployment and employment, can evaluate many open vacancies simultaneously and choose to which they make an application. Business cycles are propagated through turbulence in the economy. Structural parameters of the model are estimated on U.S. data, targeting aggregate time series. The model can generate large volatility in unemployment, vacancies, and worker flows across jobs and employment state. Further, it provides a theoretical mechanism for the shift in the Beveridge curve after the 2008 recession - a phenomenon often referred to as the jobless recovery. That is, persistently low employment after the recession, despite output per worker and vacancies having returned to pre-crisis levels.

Language
Englisch

Bibliographic citation
Series: IZA Discussion Papers ; No. 15017

Classification
Wirtschaft
Labor Turnover; Vacancies; Layoffs
Unemployment: Models, Duration, Incidence, and Job Search
Subject
Beveridge curve
screening
jobless recovery

Event
Geistige Schöpfung
(who)
Bradley, Jake
Event
Veröffentlichung
(who)
Institute of Labor Economics (IZA)
(where)
Bonn
(when)
2022

Handle
Last update
10.03.2025, 11:43 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Bradley, Jake
  • Institute of Labor Economics (IZA)

Time of origin

  • 2022

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