Understanding Labour Market Frictions: A Tobinâ€™s Q Approach
Labour market friction is viewed as the Tobinâ€™s Q of an employed worker as opposed to the position of the Beveridge curve. This Tobinâ€™s Q is inversely proportional to the average quality of the match between employers and workers. Based on this measure, I find that the labour market friction has a procyclical trend in the US, which is indicative of the fact that firms compromise on the quality of the skill match during an expansion.
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