Gross Worker Flows over the Life Cycle

We analyze the gross worker flows over the life cycle by constructing a quantitative general equilibrium model. Using U.S. data, we first document the life‐cycle patterns of flows across different labor market states (employment, unemployment, and not in the labor force), as well as job‐to‐job transitions. We then build a model of the aggregate labor market that incorporates the life cycle of workers, consumption‐saving decisions, and labor market frictions. We estimate the model and use it to examine the effects of policies on aggregate labor market outcomes. In particular, we analyze a taxes‐and‐transfers policy and an unemployment insurance policy.