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Marginal Jobs, Heterogeneous Firms, and Unemployment Flows

Author

Listed:
  • Michael W. L. Elsby
  • Ryan Michaels

Abstract

This paper introduces a notion of firm size into a search and matching model with endogenous job destruction. The outcome is a rich, yet analytically tractable framework that can be used to analyze a broad set of features of both the cross-section and aggregate dynamics of the labor market. The model provides a coherent account of the distributions of employer size and employment growth across establishments, the amplitude and propagation of cyclical fluctuations in worker flows, the negative comovement of unemployment and vacancies, and the dynamics of the distribution of employer size over the business cycle. (JEL E24, E32, J63, J64)

Suggested Citation

  • Michael W. L. Elsby & Ryan Michaels, 2013. "Marginal Jobs, Heterogeneous Firms, and Unemployment Flows," American Economic Journal: Macroeconomics, American Economic Association, vol. 5(1), pages 1-48, January.
  • Handle: RePEc:aea:aejmac:v:5:y:2013:i:1:p:1-48
    Note: DOI: 10.1257/mac.5.1.1
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    References listed on IDEAS

    as
    1. Algan, Yann & Allais, Olivier & Den Haan, Wouter J., 2008. "Solving heterogeneous-agent models with parameterized cross-sectional distributions," Journal of Economic Dynamics and Control, Elsevier, vol. 32(3), pages 875-908, March.
    2. Algan, Yann & Allais, Olivier & Den Haan, Wouter J., 2008. "Solving heterogeneous-agent models with parameterized cross-sectional distributions," Journal of Economic Dynamics and Control, Elsevier, vol. 32(3), pages 875-908, March.
    3. Eberly, Janice C. & Van Mieghem, Jan A., 1997. "Multi-factor Dynamic Investment under Uncertainty," Journal of Economic Theory, Elsevier, vol. 75(2), pages 345-387, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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    Cited by:

    1. Mecikovsky, Ariel Matias & Meier, Matthias, 2014. "Do plants freeze upon uncertainty shocks?," Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100541, Verein für Socialpolitik / German Economic Association.
    2. Kudoh, Noritaka & Miyamoto, Hiroaki & Sasaki, Masaru, 2015. "Employment and Hours over the Business Cycle in a Model with Search Frictions," IZA Discussion Papers 8946, Institute for the Study of Labor (IZA).
    3. John Haltiwanger & Henry Hyatt & Erika McEntarfer, 2018. "Who Moves Up the Job Ladder?," Journal of Labor Economics, University of Chicago Press, vol. 36(S1), pages 301-336.
      • John Haltiwanger & Henry Hyatt & Erika McEntarfer, 2015. "Who Moves Up the Job Ladder?," NBER Chapters,in: Firms and the Distribution of Income: The Roles of Productivity and Luck National Bureau of Economic Research, Inc.
    4. Gavazza, Alessandro & Mongey, Simon & Violante, Giovanni L, 2016. "Aggregate recruiting intensity," LSE Research Online Documents on Economics 69017, London School of Economics and Political Science, LSE Library.
    5. Pau Roldan & Sophia Gilbukh, 2017. "Firm Dynamics and Pricing under Customer Capital Accumulation," 2017 Meeting Papers 1235, Society for Economic Dynamics.
    6. Nicolas Roys, 2016. "Persistence of Shocks and the Reallocation of Labor," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 22, pages 109-130, October.
    7. Laurent Denant-Boèmont & Carl Gaigné & Romain Gaté, 2016. "Urban spatial structure, transport-related emissions and welfare," Economics Working Paper Archive (University of Rennes 1 & University of Caen) 2016-18, Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS.
    8. Daniel Kopasker & Holger Görg & Hassan Molana & Catia Montagna, 2013. "Negative Shocks, Job Creation, and Selection," WWWforEurope Working Papers series 11, WWWforEurope.
    9. Hassan Molana & Catia Montagna, 2015. "Selection, Trade, and Employment: the Strategic Use of Subsidies," WWWforEurope Policy Paper series 21, WWWforEurope.
    10. Görg, Holger & Henze, Philipp & Jienwatcharamongkhol, Viroj & Kopasker, Daniel & Molana, Hassan & Montagna, Catia & Sjöholm, Fredrik, 2017. "Firm size distribution and employment fluctuations: Theory and evidence," Research in Economics, Elsevier, vol. 71(4), pages 690-703.
    11. Michael W. L. Elsby & Ryan Michaels & David Ratner, 2015. "The Beveridge Curve: A Survey," Journal of Economic Literature, American Economic Association, vol. 53(3), pages 571-630, September.
    12. Lucia S. Foster & Cheryl A. Grim & John Haltiwanger & Zoltan Wolf, 2017. "Macro and Micro Dynamics of Productivity: From Devilish Details to Insights," Working Papers 17-41r, Center for Economic Studies, U.S. Census Bureau.
    13. Shigeru Fujita & Makoto Nakajima, 2016. "Worker Flows and Job Flows: A Quantitative Investigation," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 22, pages 1-20, October.
    14. Leland D. Crane, 2014. "Firm Dynamics and Assortative Matching," Working Papers 14-25, Center for Economic Studies, U.S. Census Bureau.
    15. Cahuc, Pierre, 2014. "Search, flows, job creations and destructions," Labour Economics, Elsevier, vol. 30(C), pages 22-29.
    16. Ryan Decker & John Haltiwanger & Ron S. Jarmin & Javier Miranda, 2018. "Changing Business Dynamism and Productivity : Shocks vs. Responsiveness," Finance and Economics Discussion Series 2018-007, Board of Governors of the Federal Reserve System (U.S.).
    17. repec:bla:indres:v:56:y:2017:i:4:p:688-722 is not listed on IDEAS
    18. repec:eee:eecrev:v:101:y:2018:i:c:p:57-76 is not listed on IDEAS
    19. Mikhail Simutin & JessieJiaxu Wang & Lars Kuehn, 2014. "A Labor Capital Asset Pricing Model," 2014 Meeting Papers 695, Society for Economic Dynamics.
    20. GORYUNOV, Maxim, 2017. "Sorting when firms have size," Economics Working Papers MWP 2017/09, European University Institute.
    21. Laurent Denant-Boèmont & Carl Gaigné & Romain Gaté, 2016. "Urban spatial structure, transport-related emissions and welfare," Economics Working Paper Archive (University of Rennes 1 & University of Caen) 2016-18, Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS.
    22. Elhanan Helpman & Oleg Itskhoki, "undated". "Trade Liberalization and Labor Market Dynamics with Heterogeneous Firms," Working Paper 199161, Harvard University OpenScholar.
    23. Ryan Michaels & David Ratner & Michael Elsby, 2016. "Labor Market Frictions and Aggregate Employment," 2016 Meeting Papers 770, Society for Economic Dynamics.
    24. Simon Mongey & Gianluca Violante & Alessandro Gavazza, 2014. "What Shifts the Beveridge Curve? Recruitment Effort and Financial Shocks," 2014 Meeting Papers 1014, Society for Economic Dynamics.
    25. repec:eee:jetheo:v:173:y:2018:i:c:p:231-256 is not listed on IDEAS

    More about this item

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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    1. Marginal Jobs, Heterogeneous Firms, and Unemployment Flows (AEJ:MA 2013) in ReplicationWiki

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