Download or read book Efficient Firm Dynamics in a Frictional Labor Market written by Leo Kaas and published by . This book was released on 2015 with total page 57 pages. Available in PDF, EPUB and Kindle. Book excerpt: The introduction of firm size into labor search models raises the question how wages are set when average and marginal product differ. We develop and analyze an alternative to the existing bargaining framework: Firms compete for labor by publicly posting long-term contracts. In such a competitive search setting, firms achieve faster growth not only by posting more vacancies, but also by offering higher lifetime wages that attract more workers which allows to fill vacancies with higher probability, consistent with empirical regularities. The model also captures several other observations about firm size, job flows, and pay. In contrast to bargaining models, efficiency obtains on all margins of job creation and destruction, both with idiosyncratic and aggregate shocks. The planner solution allows a tractable characterization which is useful for computational applications.

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 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 Firm Dynamics with Frictional Product and Labor Markets written by Leo Kaas and published by . This book was released on 2017 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Efficient Investments Job Dynamics and Frictional Dispersion written by Shouyong Shi and published by . This book was released on 2018 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt: When there are search frictions in the labor market, physical capital accumulation by firms interacts with job dynamics. To study this interaction, this paper integrates directed, on-the-job search (OJS) into the neoclassical theory of firm investments, analytically characterizes the social optimum and quantitatively evaluates the model. The constrained social optimum features a continuous ladder of capital stocks across jobs and, hence, of labor productivity among homogeneous workers. Workers who are employed from unemployment optimally start at the bottom of the ladder. There is a socially efficient tradeoff between reducing unemployment and increasing labor productivity. Firm investments move a worker up the ladder continuously and OJS makes a worker jump up on the ladder in discrete steps. OJS is socially efficient when the capital stock is low, despite that job-to-job transition destroys an existing job. OJS is front-loaded and stops after a finite number of job switches. In contrast, investments by firms continue throughout a worker's employment. Moreover, investments are partially delayed when the capital stock is low, and so investments can be hump-shaped over tenure and over the capital stock. Calibration exercises show that the social optimum generates large frictional dispersion in labor productivity, significant returns to tenure, and persistently large costs of job loss.

Download or read book Firm Dynamics With Frictional Product And Labor Markets written by Leo Kaas and published by . This book was released on 2021 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

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 Firm Dynamics and Labor Market Consequences written by Hodaka Morita and published by . This book was released on 2008 with total page 31 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper explores a new model of firm dynamics that incorporates workers, their accumulation of specific human capital, and their mobility. A firm's production efficiency is determined by the levels of its managerial capability and its workers' firm-specific human capital in the model. Elaborating on the connection between firm dynamics and specific human capital, I show that the importance of managerial capability systematically influences firm dynamics and employment practices. The model offers a new perspective on the welfare consequences of apparently anticompetitive entry restrictions. By incorporating a government that can enforce entry regulations in the model, I demonstrate that entry restrictions can improve welfare by mitigating the underinvestment problem in specific human capital. The model's empirical and policy implications are also discussed.

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 Essays on Firm Dynamics and Labor Market Flows written by Bihemo Francis Kimasa and published by . This book was released on 2021 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Dual Labor Markets and the Equilibrium Distribution of Firms written by Josep Pijoan-Mas and published by . This book was released on 2022 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: We study the effects of a dual labor market structure on firm dynamics, the firm size distribution, and aggregate productivity. Using rich Spanish administrative data, we document that the usage of fixed-term (FT) contracts is very heterogeneous across firms within narrowly defined sectors, and that the share of temporary workers increases monotonically with firm size. We write an equilibrium search-and-matching model of firm dynamics with FT and open-ended (OE) contracts to understand the choice of contract type by heterogeneous firms and the equilibrium joint distribution of employment and temporary share across firms. A key feature of the calibrated economy is that matching efficiency is much larger in the FT than in the OE market. Because of this, firms face a trade-off between the lower costs of attracting workers to FT contracts and the higher turnover of FT vacancies. With decreasing returns to scale, the opportunity cost of unfilled vacancies is lower for larger firms, so these firms hire a higher fraction of temporary workers. In equilibrium, the dual labor market structure makes it difficult for firms to become large because of the high turnover of FT contracts and the strong competition of smaller firms for OE contracts. In counterfactual exercises, we find that limiting the duration of FT contracts decreases the share of temporary employment and the unemployment rate, but at the expense of firm destruction and lower aggregate productivity. Instead, making FT contracts more similar to OE contracts by increasing their duration allows the economy to expand through a reduction in the unemployment rate and an increase in aggregate productivity.

Download or read book Labor Market Efficiency Wages and Employment when Search Frictions Interact with Intrafirm Bargaining written by Pierre Cahuc and published by . This book was released on 2001 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on Firm Dynamics and Labor Markets written by Umberto Muratori and published by . This book was released on 2021 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The two chapters of this dissertation explore two central topics of the current policy debate.The first chapter studies the increase in markups experienced in the US starting from the 1980s. I document new facts on the evolution of markups by cohorts of firms, and I provide evidence that these patterns are linked to knowledge creation and knowledge diffusion. This chapter investigates, through the lens of a structural model, how the size of the technological gap and the speed of catching up with the frontier affect welfare. The quantitative results suggest that knowledge diffuses 38% faster in 2010 than in 1980, and the household experiences a consumption-equivalent welfare gain of 0.29% in an economy in which the quality of innovation and the intensity of knowledge diffusion is set at the 2010 values rather than the 1980 values.The second chapter investigates the impact of extensions in unemployment benefits duration on labor market sorting. The findings provide support for the hypothesis that unemployment insurance benefits increase wages by improving the employee-employer matches. The results also show bigger effects of unemployment insurance benefits extensions on match quality for those more likely to be liquidity constrained such as women, non-whites, and less-educated workers.

Download or read book Efficiency and Labor Market Dynamics in a Model of Labor Selection written by Sanjay K. Chugh and published by . This book was released on 2013 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Employment and Firm Heterogeneity Capital Allocation and Countercyclical Labor Market Policies written by Brendan Epstein and published by . This book was released on 2017 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Many countries have large employment shares in micro and small firms that have limited access to formal financing and therefore rely on input credit. Such countries are mainly emerging and developing economies, whose business cycle dynamics are increasingly important for the global economy in light of the dramatic rise in international linkages and spillovers that have occurred over the last several decades. Emerging and developing economies implemented a host of countercyclical labor market policies amid the global financial crisis, but data limitations on high-frequency labor and job flows prevent a detailed empirical assessment of the effectiveness of these policies. To address this problem, we develop a business cycle model with frictional labor markets that is novel in light of its consistency with the employment and firm structure of emerging and developing economies. We use the model to assess the aggregate impact of key countercyclical labor market policies. We find that hiring subsidies and job intermediation services for large firms are particularly effective in aiding recoveries. Policies targeting smaller firms yield limited aggregate benefits and may even be detrimental to the recovery process. The labor market structure shapes sectoral allocation and explains the economy's differential response to policy.

Download or read book Coupled Dynamics of Labor and Firms Through Complex Networks written by Omar A. Guerrero and published by . This book was released on 2013 with total page 170 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation bridges the gap between labor and firm dynamics through the study of complex networks in labor markets. With extensive use of large-scale employer-employee matched micro-data and agent-based modeling, we tap into the effects that networked structures (between individuals or between firms) exert in labor outcomes and employment dynamics. Some of the contributions of this work are: (i) the first characterization of a network of firms for an entire economy (connected through labor flows, i.e. labor flow networks); (ii) the study of the relationship between labor flow networks and employment dynamics; (iii) agent-based models that generate rich stylized facts about labor, firm, and social dynamics from microeconomic behavior; (iv) providing the microeconomic foundations of the formation process of labor flow networks by coupling job search models with models about the formation of complex networks. We show that the study of labor dynamics can be enriched by coupling firm dynamics. Using agent-based modeling is a natural way to deal with the heterogeneous experiences of workers and firms while maintaining a simple representation of the labor market. Despite their simplicity these models are grounded on empirical evidence obtained from large-scale micro-data and are capable of generating numerous stylized facts simultaneously. This approach has great potential for the design and evaluation of labor policies. Therefore, governments, regulators, and policy-makers would be greatly benefited from collecting large-scale labor micro-data, analyzing labor flow networks, and developing agent-based models of labor markets.

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.