Gross Worker and Job Flows in Europe
Despite the impression of Eurosclerosis, labour markets in Europe are in fact quite active. Flows into and out of unemployment are large, countercyclical, and highly coincident in the four European countries examined in this paper. The most surprising finding is that exits from unemployment exhibit a countercyclical pattern, similar to that in Japan and the United States. It may be explained by a matching function, for which estimates are presented. Worker flows seem very different from job flows. Because the links between these necessarily related labour market flows have not been studied so far, we present a model which can match the jobs and worker flows stylized facts.
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