IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

The Labour Market over the Business Cycle: Can Theory Fit the Facts?

Listed author(s):
  • S Millard
  • Andrew Scott
  • M Sensier

We examine the ability of six labour market models to account for the business cycle behaviour of UK labour markets when embedded in a stochastic growth model. WE assess the models in terms of : (i) their ability to mimic general business cycle correlations and volatility (ii) their success at explaining the persistence of labour market fluctuations and (iii) whether the models can explain why the growth and speed of adjustment of labour market variables changes between periods of expansions and contractions. The main success of the models is the ability to broadly account for business cycle correlations and co-movements and the changes in employment/unemployment growth rates between expansions and contractions. However, there are three main failures (a) the models tend to produce insufficiently volatile employment and unemployment fluctuations (b) the models tend to produce too strong a correlation between wages and employment (c) most of the models generate only brief temporary deviations in unemployment in response to shocks rather than the protracted dynamics of the data.

To our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.

Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0364.

in new window

Date of creation: Sep 1997
Handle: RePEc:cep:cepdps:dp0364
Contact details of provider: Web page:

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:cep:cepdps:dp0364. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.