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Job-Finding and Job-Losing: A Comprehensive Model of Heterogeneous Individual Labor-Market Dynamics

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  • Robert E. Hall
  • Marianna Kudlyak

Abstract

We track the path that a worker follows after losing a job. Initially, the typical job-loser spends some time out of the labor force and in job search. Only a month or two later, in normal times, the worker lands a job. But the job is frequently brief. Over the next few months, the worker finds a good match that becomes a long-term job. Short-term jobs tend to precede long-term ones. Short-term employment shares some of the characteristics of unemployment and some of the characteristics of employment. We show that this pattern of moving among working, searching for a job, and being out of the labor force is concentrated in a segment of the working-age population. In other segments, individuals are insulated from disturbances to their activities in the labor market. Some work continuously while others are always out of the labor market. We develop a model that incorporates heterogeneity across and within these segments.

Suggested Citation

  • Robert E. Hall & Marianna Kudlyak, 2019. "Job-Finding and Job-Losing: A Comprehensive Model of Heterogeneous Individual Labor-Market Dynamics," Working Paper Series 2019-5, Federal Reserve Bank of San Francisco.
  • Handle: RePEc:fip:fedfwp:2019-05
    DOI: 10.24148/wp2019-05
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    Cited by:

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    2. Raven Molloy & Christopher Smith & Abigail K. Wozniak, 2020. "Changing Stability in U.S. Employment Relationships: A Tale of Two Tails," NBER Working Papers 26694, National Bureau of Economic Research, Inc.
    3. Chodorow-Reich, Gabriel & Coglianese, John, 2021. "Projecting unemployment durations: A factor-flows simulation approach with application to the COVID-19 recession," Journal of Public Economics, Elsevier, vol. 197(C).
    4. Hie Joo Ahn & James Hamilton, . "Measuring Labor-Force Participation and the Incidence and Duration of Unemployment," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics.
    5. Finkelstein Shapiro, Alan & Olivero, Maria Pia, 2020. "Lending relationships and labor market dynamics," European Economic Review, Elsevier, vol. 127(C).
    6. Guimarães, Luis & Gil, Pedro, 2019. "Looking ahead at the effects of automation in an economy with matching frictions," MPRA Paper 96238, University Library of Munich, Germany.
    7. Martin Garcia-Vazquez, 2021. "Identification and Estimation of Non-stationary Hidden Markov Models," Working Papers 2021-023, Human Capital and Economic Opportunity Working Group.

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    More about this item

    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
    • 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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