Labor Turnover and the Dynamics of Labor Productivity
AbstractThis paper develops a general equilibrium labor search model to match the dynamic behavior of job creation, job destruction, employment, and labor productivity. Persistence in idiosyncratic productivity levels and endogenous job destruction generate a changing distribution of labor productivity across jobs that has implications for the evolution of aggregate labor productivity. Realistic cyclical dynamics are produced, with labor productivity leading the cycle and employment lagging the cycle. The results show that a delay in some job destruction in response to a negative shock is essential to fitting dynamic patterns in the data. The paper also implements a computationally feasible method for solving models with persistent idiosyncratic shocks without requiring shocks to be limited to transitions on a coarse state space
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Bibliographic InfoPaper provided by Georgetown University, Department of Economics in its series Working Papers with number gueconwpa~03-03-32.
Date of creation: 30 Mar 2003
Date of revision:
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Postal: Georgetown University Department of Economics Washington, DC 20057-1036
Web page: http://econ.georgetown.edu/
Postal: Roger Lagunoff Professor of Economics Georgetown University Department of Economics Washington, DC 20057-1036
Find related papers by JEL classification:
- E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
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- Robert Hussey, 2005. "Quadrature-Based Methods for Solving Heterogeneous Agent Models with Discontinuous Distributions," Computational Economics, Society for Computational Economics, vol. 26(1), pages 1-17, August.
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