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Job Duration and Match Characteristics over the Business Cycle

Author

Listed:
  • Ismail Baydur

    (Singapore Management University)

  • Toshihiko Mukoyama

    (Georgetown University)

Abstract

This paper studies the cyclical behavior of job separation and the characteristics of matches between workers and jobs. We estimate a proportional hazard model with competing risks, distinguishing between different types of separations. A higher unemployment rate at the start of an employment relationship increases the probability of job-to-job transitions, whereas its effect on employment-to-unemployment transitions is negative. We then build a simple job-ladder model to interpret our empirical results. A model with two-dimensional heterogeneity in match (job) characteristics has the same qualitative features as the data. Once the model is calibrated to include cyclicality in the offered match characteristics, it can also fit the quantitative features of the data. The model reveals matches formed in booms provide more nonwage utility to the workers but are subject to a higher future probability of separation shocks. (Copyright: Elsevier)

Suggested Citation

  • Ismail Baydur & Toshihiko Mukoyama, 2020. "Job Duration and Match Characteristics over the Business Cycle," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 37, pages 33-53, July.
    • Handle: RePEc:red:issued:18-426
    DOI: 10.1016/j.red.2020.01.003
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    Cited by:

    1. Choi, Sekyu & Figueroa, Nincen & Villena-Roldán, Benjamin, 2020. "Wage Cyclicality Revisited: The Role of Hiring Standards," MPRA Paper 120307, University Library of Munich, Germany, revised 21 Apr 2022.
    2. Per Krusell & Toshihiko Mukoyama & Richard Rogerson & Ayşegül Şahin, 2017. "Gross Worker Flows over the Business Cycle," American Economic Review, American Economic Association, vol. 107(11), pages 3447-3476, November.
    3. Bertheau, Antoine & Vejlin, Rune Majlund, 2023. "Job Ladders by Firm Wage and Productivity," IZA Discussion Papers 15872, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    Business cycles; Match characteristics; Job duration; Unemployment; Job-to-job transitions;
    All these keywords.

    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
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • 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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