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Job Search Intensity and Wage Rigidity in Business Cycles

Author

Listed:
  • Yuki Uemura

    (Graduate School of Economics, Kyoto University)

Abstract

This paper examines the job search behavior of unemployed workers over the business cycle. The paper first constructs a standard search and matching model with endogenous search efforts, wage rigidity, and a generalized matching function. Contrary to the existing literature, the proposed model generates both procyclical and countercyclical search intensity, depending on the degree of wage rigidity and the elasticity parameter of the matching function. The paper then calibrates the model to the U.S. economy and provides various impulse response analyses. The numerical exercises show that the model successfully and simultaneously reproduces countercyclical search efforts and sizable labor market fluctuations.

Suggested Citation

  • Yuki Uemura, 2022. "Job Search Intensity and Wage Rigidity in Business Cycles," KIER Working Papers 1078, Kyoto University, Institute of Economic Research.
    • Handle: RePEc:kyo:wpaper:1078
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    References listed on IDEAS

    as
    1. Marcus Hagedorn & Iourii Manovskii, 2008. "The Cyclical Behavior of Equilibrium Unemployment and Vacancies Revisited," American Economic Review, American Economic Association, vol. 98(4), pages 1692-1706, September.
    2. Toshihiko Mukoyama & Christina Patterson & Ayşegül Şahin, 2018. "Job Search Behavior over the Business Cycle," American Economic Journal: Macroeconomics, American Economic Association, vol. 10(1), pages 190-215, January.
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    9. Heiko Stüber, 2017. "The Real Wage Cyclicality of Newly Hired and Incumbent Workers in Germany," Economic Journal, Royal Economic Society, vol. 127(600), pages 522-546, March.
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    More about this item

    Keywords

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

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