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Vacancy posting, job separation and unemployment fluctuations

Listed author(s):
  • Barnichon, Regis

What is the relative importance of hiring and separation in driving unemployment fluctuations? This paper presents a framework to decompose the moments of unemployment and study the respective contributions of vacancy posting, a measure of firms’ hiring efforts, and separation. Separation accounts for about 40% of unemployment's variance, compared to 60% for vacancy posting, and contributes to about 60% of unemployment steepness asymmetry, the fact that unemployment increases faster than it decreases. Further, while vacancy posting is, on average, the most important contributor of unemployment fluctuations, the opposite is true around business cycle turning points, when separation is responsible for most of unemployment movements.

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File URL: http://www.sciencedirect.com/science/article/pii/S0165188911001795
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Article provided by Elsevier in its journal Journal of Economic Dynamics and Control.

Volume (Year): 36 (2012)
Issue (Month): 3 ()
Pages: 315-330

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Handle: RePEc:eee:dyncon:v:36:y:2012:i:3:p:315-330
DOI: 10.1016/j.jedc.2011.09.006
Contact details of provider: Web page: http://www.elsevier.com/locate/jedc

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