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The Macro-dynamics of Sorting between Workers and Firms

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  • Jeremy Lise

    ()
    (University College London)

  • Jean-Marc Robin

    ()
    (Sciences-Po, Paris and University College London)

Abstract

We develop an equilibrium model of on-the-job search with ex-ante heterogeneous workers and firms, aggregate uncertainty and vacancy creation. The model produces rich dynamics in which the distributions of unemployed workers, vacancies and worker-firm matches evolve stochastically over time. We prove that the surplus function, which fully characterizes the match value and the mobility decision of workers, does not depend on these distributions. We estimate the model on US labor market data from 1951-2007 and predict the fit for 2008-12. We use the model to measure the cyclicality of mismatch between workers and jobs.

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File URL: http://humcap.uchicago.edu/RePEc/hka/wpaper/Lise_Robin_2013_macro-dyn_workers-firms.pdf
File Function: First version, August, 2013
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Bibliographic Info

Paper provided by Human Capital and Economic Opportunity Working Group in its series Working Papers with number 2013-012.

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Date of creation: Sep 2013
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Handle: RePEc:hka:wpaper:2013-012

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Keywords: On-the-job search; Heterogeneity; Aggregate fluctuations; Mismatch;

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References

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  1. Hagedorn, Marcus & Manovskii, Iourii, 2008. "The cyclical behavior of equilibrium unemployment and vacancies revisited," Working Paper Series 0853, European Central Bank.
  2. Giuseppe Moscarini & Fabien Postel-Vinay, 2010. "Stochastic Search Equilibrium," Cowles Foundation Discussion Papers 1754, Cowles Foundation for Research in Economics, Yale University.
  3. Moscarini, Giuseppe & Thomsson, Kaj, 2006. "Occupational and Job Mobility in the US," Working Papers 19, Yale University, Department of Economics.
  4. Postel-Vinay & Robin, 2002. "Equilibrium wage dispersion with worker and employer heterogeneity," Working Papers 155908, Institut National de la Recherche Agronomique, France.
  5. Guido Menzio & Shouyong Shi, 2008. "Efficient Search on the Job and the Business Cycle," Working Papers tecipa-327, University of Toronto, Department of Economics.
  6. Melvyn G. Coles & Dale T. Mortensen, 2012. "Equilibrium Labor Turnover, Firm Growth and Unemployment," NBER Working Papers 18022, National Bureau of Economic Research, Inc.
  7. Jean-Marc Robin, 2010. "On the dynamics of unemployment and wage distributions," CeMMAP working papers CWP04/10, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
  8. Guido Menzio & Shouyong Shi, 2008. "Efficient Search on the Job and the Business Cycle, Second Version," PIER Working Paper Archive 09-010, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 28 Feb 2009.
  9. Guido Menzio & Shouyong Shi, 2009. "Block Recursive Equilibria for Stochastic Models of Search on the Job," NBER Working Papers 14907, National Bureau of Economic Research, Inc.
  10. Guido Menzio & Shouyong Shi, 2010. "Directed Search on the Job, Heterogeneity, and Aggregate Fluctuations," Working Papers tecipa-390, University of Toronto, Department of Economics.
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Cited by:
  1. repec:ese:iserwp:2013-01 is not listed on IDEAS
  2. Carlos Carrillo-Tudela & Ludo Visschers, 2014. "Unemployment and Endogenous Reallocation over the Business Cycle," Economics Working Papers we1410, Universidad Carlos III, Departamento de Economía.

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