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Job Heterogeneity and Aggregate Labor Market Fluctuations

Author

Listed:
  • Krolikowski, Pawel

    (Federal Reserve Bank of Cleveland)

Abstract

This paper disciplines a model with search over match quality using microeconomic evidence on worker mobility patterns and wage dynamics. In addition to capturing these individual data, the model provides an explanation for aggregate labor market patterns. Poor match quality among first jobs implies large fluctuations in unemployment due to a responsive job destruction margin. Endogenous job destruction generates a burst of layoffs at the onset of a recession and, together with on-the-job search, generates a negative comovement between unemployment and vacancies. A significant job ladder, consistent with the empirical wage dispersion, provides ample scope for the propagation of vacancies and unemployment.

Suggested Citation

  • Krolikowski, Pawel, 2019. "Job Heterogeneity and Aggregate Labor Market Fluctuations," Working Papers (New Series) 190400, Federal Reserve Bank of Cleveland.
  • Handle: RePEc:fip:fedcwq:190400
    DOI: 10.26509/frbc-wp-201904
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    File URL: https://doi.org/10.26509/frbc-wp-201904
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    References listed on IDEAS

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    1. Kenneth L. Judd, 1998. "Numerical Methods in Economics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262100711, January.
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    Cited by:

    1. Claudia Macaluso, 2017. "Skill Remoteness and Post-layoff Labor Market Outcomes," 2017 Meeting Papers 569, Society for Economic Dynamics.

    More about this item

    Keywords

    Unemployment; job destruction; amplification; match-quality;

    JEL classification:

    • 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
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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