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Search, Shirking and Labor Market Volatility

Author

Listed:
  • Christopher Martin

    (University of Bath)

  • Bingsong Wang

    (University of Warwick)

Abstract

This paper proposes a modified version of the standard search and matching model of the labour market that includes a shirking mechanism. We show that our model delivers a close match to the simulated volatilities, correlations and autocorrelations of unemployment, vacancies, labour market tightness and the job finding rate with values observed in US data. In doing so, it outperforms prominent alternative models. Our model also has novel policy implications for the impact of income taxes, subsidies on hiring and employment taxes on unemployment and its volatility.

Suggested Citation

  • Christopher Martin & Bingsong Wang, 2016. "Search, Shirking and Labor Market Volatility," Department of Economics Working Papers 56/16, University of Bath, Department of Economics.
    • Handle: RePEc:eid:wpaper:52882
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    File URL: https://purehost.bath.ac.uk/ws/files/158386094/search_shirking_labor_market_volatility.pdf
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    Cited by:

    1. is not listed on IDEAS
    2. Matsue, Toyoki, 2022. "Role of worker flows in the relationship between job offers and employment," MPRA Paper 115316, University Library of Munich, Germany.
    3. Andres García-Suaza & Fernando Jaramillo & Marlon Salazar, 2023. "Tax policies, informality, and real wage rigidities," Documentos de Trabajo 20744, Universidad del Rosario.
    4. M. Salazar, 2021. "Tax policies, informality, and real wage rigidities," Documentos de trabajo - Alianza EFI 20044, Alianza EFI.

    More about this item

    JEL classification:

    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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