Download or read book Frictional and Non Frictional Unemployment in a Labor Market with Matching Frictions written by José Ramón García Martínez and published by . This book was released on 2017 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using the Mortensen and Pissarides model of a labor market with frictions, this paper proposes a new method, simpler than the one presented in Michaillat ([Michaillat, P., 2012]), for decomposing unemployment into frictional and non-frictional (rationing) unemployment for a derived rigid wage-setting rule. We use it to compute the frictional and non frictional unemployment rate for two economies characterized by different labor market institutions, namely the US and the Spanish economy. For the entire period under study, the US frictional unemployment rate is around 36 per cent of total unemployment, whereas for Spain, approximately 20 per cent of all unemployment is due to frictions. This outcome may be explained by the fact that Spain is a country with more labor market rigidities than the US. The empirical results obtained with our method are also consistent with the main result of Michaillat ([Michaillat, P., 2012]): in both countries, non-frictional unemployment increases in recessions.

Download or read book A Model of Unemployment with Matching Frictions and Job Rationing written by Pascal Michaillat and published by . This book was released on 2010 with total page 382 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation proposes a model of the labor market that integrates two important sources of unemployment. The first source is a matching friction, which is a friction in matching unemployed workers to recruiting firms. The second source is job rationing, which is a possible shortage of jobs in the economy. To examine how these two sources interact over the business cycle, I decompose unemployment into a component caused by job rationing--rationing unemployment--and another component caused by matching frictions--frictional unemployment. Formally, I define rationing unemployment as the level of unemployment that would prevail if matching frictions disappeared, and frictional unemployment as additional unemployment due to the matching frictions. The main theoretical result of this dissertation is that during recessions rationing unemployment increases, driving the rise in total unemployment, whereas frictional unemployment decreases. Intuitively, in bad times, there are too few jobs, the labor market is slack, recruiting is easy, and matching frictions contribute little to unemployment. I specify a model in which job rationing stems from a small amount of wage rigidity and diminishing marginal returns to labor. In the model calibrated with U.S. data, I find that when unemployment is below 5%, it is only frictional; but when unemployment reaches 9%, frictional unemployment amounts to less than 2% of the labor force, and rationing unemployment to more than 7%. I then show that in recessions, job rationing generates inefficiently high unemployment, which leaves room for labor market policies to improve social welfare. I evaluate three labor market policies--direct employment, placement services, and a wage subsidy--over the business cycle. First, I compute state-dependent fiscal multipliers (the increase in social welfare obtained by spending one dollar on a policy) to determine the effectiveness of these unemployment-reducing policies. I prove theoretically that placement services are more effective in good times than in bad times. The converse is true of direct employment. Intuitively, in bad times, frictional unemployment is low; placement services aim to further reduce this component and are therefore ineffective. The effectiveness of direct employment is a function of how much it crowds private employment out; in bad times, competition for workers is weak and crowding out is limited; thus, this policy is effective. In the calibrated model, wage subsidies are also more effective in bad times than in good times. To conclude, I characterize the optimal mix of policies implemented by a benevolent social planner. The optimal unemployment-reducing policy evolve over the business cycle: its puts more weight on policy instruments reducing matching frictions (placement services) in good times than in bad times; conversely, it puts more weight on policy instruments creating jobs directly (direct employment and a wage subsidy) in bad times than in good times. Intuitively, the optimal unemployment-reducing policy should adapt to the state of the labor market because of the cyclical fluctuations in the sources of unemployment.

Download or read book Labor Credit and Goods Markets written by Nicolas Petrosky-Nadeau and published by MIT Press. This book was released on 2017-11-10 with total page 271 pages. Available in PDF, EPUB and Kindle. Book excerpt: An integrated framework to study the theoretical and quantitative properties of economies with frictions in labor, financial, and goods markets. This book offers an integrated framework to study the theoretical and quantitative properties of economies with frictions in multiple markets. Building on analyses of markets with frictions by 2010 Nobel laureates Peter A. Diamond, Dale T. Mortensen, and Christopher A. Pissarides, which provided a new theoretical approach to search markets, the book applies this new paradigm to labor, finance, and goods markets. It shows, in particular, how frictions in different markets interact with each other. The book first covers the main developments in the analysis of the labor market in the presence of frictions, offering a systematic analysis of the dynamics of this environment and explaining the notion of macroeconomic volatility. Then, building on the generality and simplicity of the search analysis, the book adapts it to other markets, developing the tools and concepts to analyze friction in these markets. The book goes beyond the traditional general equilibrium analysis of markets, which is often frictionless. It begins with the standard analysis of a single market, and then sequentially integrates more markets into the analysis, progressing from labor to financial to goods markets. Along the way, the book provides a number of useful results and insights, including the existence of a direct link between search frictions and the degree of volatility in the economy.

Download or read book Frictional Labor Markets and Policy Interventions written by Alessandra Pizzo and published by . This book was released on 2016 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The objective underlying the three chapters of this thesis is the understanding of the functioning of the labor market to make a diagnosis about the potential regulatory role of a public authority in this market. ln the first chapter, I analyze, from a purely "positive" point of view, the ability of the model with search and matching frictions to reproduce short-term fluctuations of labor market variables in the United States. I propose a new calibration strategy, within a general equilibrium framework with sticky prices. In the second chapter (co-written with F. Langot), we study the determinants of changes in the labor supply over the last fifty years. Changes in the tax wedge, and two variables reflecting the institutional framework (the generosity of income in case of "non-employment" and workers' bargaining power), can explain the different trajectories of the rate employment and hours worked observed in the United States and three European economies (France, Germany and the United Kingdom). ln the third chapter, I analyze the performance of two alternative systems of social security, within the framework of a model with heterogeneous agents in terms of wealth. The agents are subject to a risk of unemployment, and the planner can provide insurance through a redistibutive tax system, based on a progressive tax and / or unemployment insurance. The progressive tax system is superior in terms of aggregate welfare to the insurance provided through unemployment benefits, through its effect on the functioning of the labor market.

Download or read book Search Theory and Unemployment written by Stephen A. Woodbury and published by Springer Science & Business Media. This book was released on 2012-12-06 with total page 244 pages. Available in PDF, EPUB and Kindle. Book excerpt: Search Theory and Unemployment contains nine chapters that survey and extend the theory of job search and its application to the problem of unemployment. The volume ranges from surveys of job search theory that take microeconomic and macroeconomic perspectives to original theoretical contributions which focus on the externalities arising from non-sequential search and search under imperfect information. It includes a clear and authoritative survey of econometric methods that have been developed to estimate models of job search, as well as two lucid contributions to the empirical search literature. Finally, it includes a study that reviews and extends the literature on optimal unemployment insurance and concludes with an appraisal of the influence of search theory on the thinking of macroeconomic policymakers.

Download or read book Frictional Unemployment 30 Success Secrets 30 Most Asked Questions on Frictional Unemployment What You Need to Know written by Kevin Blanchard and published by Emereo Publishing. This book was released on 2014-10-19 with total page 64 pages. Available in PDF, EPUB and Kindle. Book excerpt: The latest in Frictional unemployment. There has never been a Frictional unemployment Guide like this. It contains 30 answers, much more than you can imagine; comprehensive answers and extensive details and references, with insights that have never before been offered in print. Get the information you need--fast! This all-embracing guide offers a thorough view of key knowledge and detailed insight. This Guide introduces what you want to know about Frictional unemployment. A quick look inside of some of the subjects covered: Economic activity - Unemployment, Unemployment rate, Job hunting - Job hunting in economic theory, Macroeconomic policy - Unemployment, Types of unemployment, Matching theory (macroeconomics), Labour economics - The macroeconomics of labour markets, Economic theory - Unemployment, Full employment - Unemployment at Beveridge Full Employment, George J. Stigler, Macroeconomics - Unemployment, Seasonal unemployment, Matching theory (economics), Classical unemployment, Frictional unemployment - Definitions, Labor-force participation rate - Definitions, types, and theories, Central Bank - Goals of monetary policy, Structural unemployment - Relation to other unemployment, George Stigler, Frictional unemployment - Examples, Jordi Gali - Research contributions, Unemployment types, Frictional unemployment - Solutions, Macroeconomic - Unemployment, Beveridge curve - Movements of the Beveridge-curve, Employment gap, Unemployment - Cyclical unemployment, Search theory, Unemployment - Definitions, types, and theories, Kellogg School of Management - Notable faculty, Job creation, Dynamic stochastic general equilibrium - Controversy, Unemployed, Social risk management - Source of social risks, NAIRU - The natural rate hypothesis and the NAIRU, Soviet-type economic planning - Advantages, Full employment - Economic concept, and much more...

Download or read book Labor Market Friction and Unemployment written by Karl Ove Moene and published by . This book was released on 1997 with total page 209 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Looking Into the Black Box written by Barbara Petrongolo and published by . This book was released on 2000 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Firm and Worker Dynamics in a Frictional Labor Market written by Adrien G. Bilal and published by . This book was released on 2019 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper develops a random-matching model of a frictional labor market with firm and worker dynamics. Multi-worker firms choose whether to shrink or expand their employment in response to shocks to their decreasing returns to scale technology. Growing entails posting costly vacancies, which are filled either by the unemployed or by employees poached from other firms. Firms also choose when to enter and exit the market. Tractability is obtained by proving that, under a parsimonious set of assumptions, all workers' and firm decisions are characterized by their joint marginal surplus, which in turn only depends on the firm's productivity and size. As frictions vanish, the model converges to a standard competitive model of firm dynamics which allows a quantification of the misallocation cost of labor market frictions. An estimated version of the model yields cross-sectional patterns of net poaching by firm characteristics (e.g., age and size) that are in line with the micro data. The model also generates a drop in job-to-job transitions as firm entry declines, offering an interpretation to U.S. labor market dynamics around the Great Recession. All these outcomes are a reflection of the job ladder in marginal surplus that emerges in equilibrium.

Download or read book Globalization and Unemployment written by Helmut M. Wagner and published by Springer Science & Business Media. This book was released on 2013-03-14 with total page 385 pages. Available in PDF, EPUB and Kindle. Book excerpt: Globalization and unemployment are two phenomena which are amongst the most widely discussed subjects in the economic debate today. Often, globalization is regarded as being responsible for the increase in unemployment, particularly in unskilled labor. This book deals with the correlation between globalization and unemployment under various aspects: historical aspects of globalization, empirical trends and theoretical explanations of unemployment, effects of globalization in general and of European Monetary Union in particular on umemployment, labor market policy in a global economy, the impact of fiscal policy on unemployment in a global economy, as well as the effects of globalization on inflation and national stabilization policy.

Download or read book Monopsony in Motion written by Alan Manning and published by Princeton University Press. This book was released on 2013-12-03 with total page 414 pages. Available in PDF, EPUB and Kindle. Book excerpt: What happens if an employer cuts wages by one cent? Much of labor economics is built on the assumption that all the workers will quit immediately. Here, Alan Manning mounts a systematic challenge to the standard model of perfect competition. Monopsony in Motion stands apart by analyzing labor markets from the real-world perspective that employers have significant market (or monopsony) power over their workers. Arguing that this power derives from frictions in the labor market that make it time-consuming and costly for workers to change jobs, Manning re-examines much of labor economics based on this alternative and equally plausible assumption. The book addresses the theoretical implications of monopsony and presents a wealth of empirical evidence. Our understanding of the distribution of wages, unemployment, and human capital can all be improved by recognizing that employers have some monopsony power over their workers. Also considered are policy issues including the minimum wage, equal pay legislation, and caps on working hours. In a monopsonistic labor market, concludes Manning, the "free" market can no longer be sustained as an ideal and labor economists need to be more open-minded in their evaluation of labor market policies. Monopsony in Motion will represent for some a new fundamental text in the advanced study of labor economics, and for others, an invaluable alternative perspective that henceforth must be taken into account in any serious consideration of the subject.

Download or read book Dynamic Decision Making in Frictional Labor Markets written by Felix Reichling and published by . This book was released on 2007 with total page 330 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book The Insider Outsider Theory of Employment and Unemployment written by Assar Lindbeck and published by Mit Press. This book was released on 1989-11-01 with total page 300 pages. Available in PDF, EPUB and Kindle. Book excerpt: An accessible, balanced account of the insider-outsider theory of labor market activity.

Download or read book Firm and Worker Dynamics in a Frictional Labor Market written by Adrien Bilal and published by . This book was released on 2019 with total page 124 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper develops a random-matching model of a frictional labor market with firm and worker dynamics. Multi-worker firms choose whether to shrink or expand their employment in response to shocks to their decreasing returns to scale technology. Growing entails posting costly vacancies, which are filled either by the unemployed or by employees poached from other firms. Firms also choose when to enter and exit the market. Tractability is obtained by proving that, under a parsimonious set of assumptions, all workers' and firm decisions are characterized by their joint marginal surplus, which in turn only depends on the firm's productivity and size. As frictions vanish, the model converges to a standard competitive model of firm dynamics which allows a quantification of the misallocation cost of labor market frictions. An estimated version of the model yields cross-sectional patterns of net poaching by firm characteristics (e.g., age and size) that are in line with the micro data. The model also generates a drop in job-to-job transitions as firm entry declines, offering an interpretation to U.S. labor market dynamics around the Great Recession. All these outcomes are a reflection of the job ladder in marginal surplus that emerges in equilibrium.

Download or read book Essays on Frictional Labor Market written by Eunbi Ko and published by . This book was released on 2019 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation develops two models of frictional labor market which provide tools to understand some important phenomena of the US labor market.The first chapter models labor market choices of workers depending primarily on his/her marital status and the partner's labor market outcome if the worker is married. In the household of a married couple, an increase in the husband's wage leads to a rise in the number of days his wife remains out of the labor force. If only one of the couple is employed, a wage increase for the employed partner lengthens the spouse's unemployment duration. Moreover, if both are employed, their wages move in the same direction. To explain these stylized facts, I construct an equilibrium model of the labor market in which a married couple jointly chooses market participation and search for and separation from a job. Calibration shows that the model can correctly account for the facts. The unified framework with endogenous market participation and frictional search is necessary to correctly predict the correlations in spouses' labor market outcomes. Using the benchmark model, I do the policy experiments of unemployment insurance (UI) and the earned income tax credit (EITC). I show that generous UI can increase the employment-population ratio by mitigating married females' disincentive to participate in the market. I also show that the EITC increases the employment of single parents but it decreases the employment of workers who belong to other types of households. In the sense of welfare, the EITC enhances welfare for all single parents, but it reduces welfare of some married parents by reducing the value of working wives.In the second chapter, I construct a directed search model of the labor market with two types of workers and two types of firms to show that an asymmetric positive productivity shock could cause a recent upward shift of the US Beveridge curve. The model possesses an equilibrium in which unskilled workers apply to both high-tech and low-tech firms and skilled workers apply only to high-tech firms. The productivity difference between sectors affects unskilled workers' application strategy: the larger the productivity gap is, the more unskilled workers apply to high-tech firms. The calibration suggests that the productivity difference between sectors has become greater after the recession than before. This makes unskilled workers apply to a high-tech firm with a greater probability than before, which results in the lower average job-finding rate and an upward shift of the Beveridge curve.

Download or read book International Trade with Equilibrium Unemployment written by Carl Davidson and published by Princeton University Press. This book was released on 2010 with total page 433 pages. Available in PDF, EPUB and Kindle. Book excerpt: While most standard economic models of international trade assume full employment, Carl Davidson and Steven Matusz have argued over the past two decades that this reliance on full-employment modeling is misleading and ill-equipped to tackle many important trade-related questions. This book brings together the authors' pioneering work in creating models that more accurately reflect the real-world connections between international trade and labor markets. The material collected here presents the theoretical and empirical foundations of equilibrium unemployment modeling, which the authors and their collaborators developed to give researchers and policymakers a more realistic picture of how international trade affects labor markets, and of how transnational differences in labor markets affect international trade. They address the shortcomings of standard models, describe the empirics that underlie equilibrium unemployment models, and illustrate how these new models can yield vital insights into the relationship between international trade and employment. This volume also includes an indispensable general introduction as well as concise section introductions that put the authors' work in context and reveal the thinking behind their ideas. Economists are only now realizing just how important these ideas are, making this book essential reading for researchers and students.

Download or read book Tax Smoothing in Frictional Labor Markets written by David M. Arseneau and published by . This book was released on 2009 with total page 68 pages. Available in PDF, EPUB and Kindle. Book excerpt: "We re-examine the optimality of tax smoothing from the point of view of frictional labor markets. Our central result is that whether or not this cornerstone optimal fiscal policy prescription carries over to an environment with labor market frictions depends crucially on the cyclical nature of labor force participation. If the participation rate is exogenous at business-cycle frequencies -- as is typically assumed in the literature -- we show it is not optimal to smooth tax rates on labor income in the face of business-cycle shocks. However, if households do optimize at the participation margin, then tax-smoothing is optimal despite the presence of matching frictions. To understand these results, we develop a concept of general-equilibrium efficiency in search-based environments, which builds on existing (partial-equilibrium) search-efficiency conditions. Using this concept, we develop a notion of search-based labor-market wedges that allows us to trace the source of the sharply-contrasting fiscal policy prescriptions to the value of adjusting participation rates. Our results demonstrate that policy prescriptions can be very sensitive to the cyclical nature of labor-force participation in search-based environments"--P. 1.