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Resurrecting the participation margin

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  • Ebell, Monique

Abstract

This paper considers a real business cycle model with search frictions in the labor market and labor supply which is elastic along the extensive (participation) margin. Previous authors have found that such models generate counterfactually procyclical unemployment and a positively-sloped Beveridge curve. This paper presents a calibrated model which does indeed generate countercyclical unemployment and a negatively-sloped Beveridge curve despite the presence of a participation margin.

Suggested Citation

  • Ebell, Monique, 2008. "Resurrecting the participation margin," LSE Research Online Documents on Economics 19570, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:19570
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    Cited by:

    1. Monique Ebell & Christian Haefke, 2009. "Product Market Deregulation and the U.S. Employment Miracle," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 12(3), pages 479-504, July.
    2. Michael C. Burda & Mark Weder, 2016. "Payroll Taxes, Social Insurance, And Business Cycles," Journal of the European Economic Association, European Economic Association, vol. 14(2), pages 438-467, April.

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    More about this item

    Keywords

    Unemployment; Business Cycles; Labor Force Participation;
    All these keywords.

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • 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
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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