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Cross-Phenomenon Restrictions: Unemployment Effects of Layoff Costs and Quit Turbulence

Author

Listed:
  • Isaac Baley

    (Universitat Pompeu Fabra)

  • Lars Ljunqvist

    (Stockholm School of Economics)

  • Thomas Sargent

    (New York University)

Abstract

Cross-phenomenon restrictions associated with returns to labor mobility can inform calibrations of productivity processes in macro-labor models. We exploit how returns to labor mobility influence effects on equilibrium unemployment of changes in (a) layoff costs, and (b) distributions of skill losses coincident with quits (“quit turbulence†). Returns to labor mobility intermediate both effects. Ample labor reallocations observed across market economies that have different layoff costs imply that a turbulence explanation of trans-Atlantic unemployment experiences is robust to adding plausible quit turbulence. (Copyright: Elsevier)

Suggested Citation

  • Isaac Baley & Lars Ljunqvist & Thomas Sargent, 2023. "Cross-Phenomenon Restrictions: Unemployment Effects of Layoff Costs and Quit Turbulence," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 50, pages 43-60, October.
    • Handle: RePEc:red:issued:23-154
    DOI: 10.1016/j.red.2023.07.004
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    References listed on IDEAS

    as
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