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Entrepreneurship and labour market fluctuations

Author

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  • Lawrence Uren

    (University of Melbourne)

Abstract

This paper modifies the standard Mortensen and Pissarides model by introducing an endogenous decision of individuals to either become entrepreneurs or workers. This modification has little impact upon the qualitative properties of the standard Mortensen and Pissarides model. However, it can substantially amplify the impact of productivity shocks upon the level of unemployment and vacancies and provide a partial explanation for the lack of unemployment volatility identified by Shimer (2005).

Suggested Citation

  • Lawrence Uren, 2007. "Entrepreneurship and labour market fluctuations," Economics Bulletin, AccessEcon, vol. 10(13), pages 1-11.
    • Handle: RePEc:ebl:ecbull:eb-07j60005
    as

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    File URL: http://www.accessecon.com/pubs/EB/2007/Volume10/EB-07J60005A.pdf
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    References listed on IDEAS

    as
    1. Christopher A. Pissarides, 2000. "Equilibrium Unemployment Theory, 2nd Edition," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262161877, December.
    2. Krause, M.U. & Lubik, T.A., 2004. "On-the-job Search and the Cyclical Dynamics of the Labor Market," Other publications TiSEM 08a72137-ff72-4e18-add3-1, Tilburg University, School of Economics and Management.
    3. Mortensen, Dale & Pissarides, Christopher, 2011. "Job Creation and Job Destruction in the Theory of Unemployment," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 1, pages 1-19.
    4. Robert E. Hall, 2006. "Job Loss, Job Finding and Unemployment in the US Economy over the Past Fifty Years," NBER Chapters, in: NBER Macroeconomics Annual 2005, Volume 20, pages 101-166, National Bureau of Economic Research, Inc.
    5. Michael J. Pries, 2004. "Persistence of Employment Fluctuations: A Model of Recurring Job Loss," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 71(1), pages 193-215.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Gaetano Lisi & Maurizio Pugno, 2010. "Entrepreneurship and the Hidden Economy: An Extended Matching Model," International Economic Journal, Taylor & Francis Journals, vol. 24(4), pages 587-605.
    2. Lisi, Gaetano, 2010. "Introduzione allo studio dei modelli di "matching" del mercato del lavoro [Introduction to the study of matching models of unemployment]," MPRA Paper 22735, University Library of Munich, Germany.
    3. Lisi GAETANO, 2010. "The Unemployment Volatility Puzzle: The Role Of The Underground Economy," Journal of Applied Economic Sciences, Spiru Haret University, Faculty of Financial Management and Accounting Craiova, vol. 5(2(12)/Sum), pages 59-69.
    4. Gonzalo Castex & Miguel Ricaurte, 2011. "Self – Employment, Labor Market Rigidities and Unemployment Over the Business Cycle," Working Papers Central Bank of Chile 650, Central Bank of Chile.
    5. Lisi, G., 2011. "Entrepreneurship, On-the-job Search and Informal Jobs," Journal of the New Economic Association, New Economic Association, issue 9, pages 33-46.

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    More about this item

    JEL classification:

    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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