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Labour markets: what explains the resilience?

Author

Listed:
  • Bernardus Doornik
  • Deniz Igan
  • Enisse Kharroubi

Abstract

The post-pandemic recovery features significant tightness in labour markets – a situation where jobs are plentiful and available workers scarce. This special feature discusses the possible role of supply and demand factors for this tightness and the attendant contrast between buoyant employment and lacklustre output growth. We find that labour hoarding on the demand side, and adverse demographic trends and pandemic-related preference shifts on the supply side, can go a long way in explaining these dynamics. Finally, we relate labour market developments and their persistence to the inflation outlook and monetary policy trade-offs.

Suggested Citation

  • Bernardus Doornik & Deniz Igan & Enisse Kharroubi, 2023. "Labour markets: what explains the resilience?," BIS Quarterly Review, Bank for International Settlements, December.
    • Handle: RePEc:bis:bisqtr:2312f
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    References listed on IDEAS

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    1. Prithwiraj (Raj) Choudhury & Cirrus Foroughi & Barbara Larson, 2021. "Work‐from‐anywhere: The productivity effects of geographic flexibility," Strategic Management Journal, Wiley Blackwell, vol. 42(4), pages 655-683, April.
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    3. Nicholas Bloom & James Liang & John Roberts & Zhichun Jenny Ying, 2015. "Does Working from Home Work? Evidence from a Chinese Experiment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 130(1), pages 165-218.
    4. Georg Graetz & Guy Michaels, 2017. "Is Modern Technology Responsible for Jobless Recoveries?," American Economic Review, American Economic Association, vol. 107(5), pages 168-173, May.
    5. Claudio Borio & Marco Jacopo Lombardi & James Yetman & Egon Zakrajsek, 2023. "The two-regime view of inflation," BIS Papers, Bank for International Settlements, number 133, November.
    6. José María Barrero & Nicholas Bloom & Steven J. Davis, 2023. "The Evolution of Work from Home," Journal of Economic Perspectives, American Economic Association, vol. 37(4), pages 23-50, Fall.
    7. Michael Gibbs & Friederike Mengel & Christoph Siemroth, 2023. "Work from Home and Productivity: Evidence from Personnel and Analytics Data on Information Technology Professionals," Journal of Political Economy Microeconomics, University of Chicago Press, vol. 1(1), pages 7-41.
    8. Niklas Engbom, 2022. "Labor Market Fluidity and Human Capital Accumulation," NBER Working Papers 29698, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Juvonen, Petteri & Nelimarkka, Jaakko & Obstbaum, Meri & Vilmi, Lauri, 2025. "Drivers of post-pandemic price dynamics and labour market tightness in the euro area," BoF Economics Review 1/2025, Bank of Finland.
    2. Ernst Ekkehard & Feist Lisa, 2024. "Tomorrow at Work: The Age of Shortages," Intereconomics: Review of European Economic Policy, Sciendo, vol. 59(3), pages 125-131.

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    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
    • J1 - Labor and Demographic Economics - - Demographic Economics
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • 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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