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The Cyclical Volatility of Equilibrium Unemployment and Vacancies: Evidence from Italy

  • Cardullo, Gabriele
  • Guerrazzi, Marco

In this paper, we explore the fluctuations of unemployment and vacancies in the Italian labour market over the last twenty years. For reasons of data availability on unfilled job openings, this period is split in two parts. The former is covered by a help-wanted time series, while the latter is analyzed by means of a harmonized vacancy rate. In both periods, in line with previous findings on the unemployment volatility puzzle, we find that the labour market tightness indicator is much more volatile than productivity. Moreover, we show that a matching model with segmented labour markets and on-the-job search has the potential to provide a rationale for this pattern.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 51726.

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Date of creation: 26 Nov 2013
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Handle: RePEc:pra:mprapa:51726
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  1. Zhang Min, 2008. "Cyclical Behavior of Unemployment and Job Vacancies: A Comparison between Canada and the United States," The B.E. Journal of Macroeconomics, De Gruyter, vol. 8(1), pages 1-37, October.
  2. Murat Tasci & Pedro Amaral, 2013. "The Cyclical Behavior of Equilibrium Unemployment and Vacancies Across OECD Countries," 2013 Meeting Papers 450, Society for Economic Dynamics.
  3. Krause, Michael U. & Lubik, Thomas A., 2006. "The cyclical upgrading of labor and on-the-job search," Labour Economics, Elsevier, vol. 13(4), pages 459-477, August.
  4. Christopher A. Pissarides, 2000. "Equilibrium Unemployment Theory, 2nd Edition," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262161877, June.
  5. 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.
  6. cipollone piero, 2001. "Is the Italian Labour market segmented?," Temi di discussione (Economic working papers) 400, Bank of Italy, Economic Research and International Relations Area.
  7. Anna M. Falzoni & Alessandra Venturini & Claudia Villosio, 2007. "Skilled and Unskilled Wage Dynamics in Italy in the ‘90s: Changes in the individual characteristics, institutions, trade and technology," LABORatorio R. Revelli Working Papers Series 61, LABORatorio R. Revelli, Centre for Employment Studies.
  8. Katharine G. Abraham, 1987. "Help-Wanted Advertising, Job Vacancies, and Unemployment," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 18(1), pages 207-248.
  9. Nicolas Petrosky-Nadeau & Etienne Wasmer, 2013. "The Cyclical Volatility of Labor Markets under Frictional Financial Markets," American Economic Journal: Macroeconomics, American Economic Association, vol. 5(1), pages 193-221, January.
  10. Sergio Destefanis & Raquel Fonseca, 2005. "Matching Efficiency and Labour Market Reform in Italy. A Macroeconometric Assessment," CELPE Discussion Papers 93, CELPE - Centre of Labour Economics and Economic Policy, University of Salerno, Italy.
  11. Robert Shimer, 2005. "The Cyclical Behavior of Equilibrium Unemployment and Vacancies," American Economic Review, American Economic Association, vol. 95(1), pages 25-49, March.
  12. Dale Mortensen & Eva Nagypal, 2007. "More on Unemployment and Vacancy Fluctuations," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 10(3), pages 327-347, July.
  13. Gartner, Hermann & Merkl, Christian & Rothe, Thomas, 2012. "Sclerosis and large volatilities: Two sides of the same coin," Economics Letters, Elsevier, vol. 117(1), pages 106-109.
  14. Hiroaki Miyamoto, 2009. "Cyclical Behavior of Unemployment and Job Vacancies in Japan," Working Papers EMS_2009_17, Research Institute, International University of Japan.
  15. Marco Guerrazzi, 2011. "Search And Stochastic Dynamics In The Old Keynesian Economics: A Rationale For The Shimer Puzzle," Metroeconomica, Wiley Blackwell, vol. 62(4), pages 561-586, November.
  16. Michele Battisti, 2013. "Reassessing Segmentation In The Labour Market: An Application For Italy 1995–2004," Bulletin of Economic Research, Wiley Blackwell, vol. 65, pages s38-s55, 05.
  17. Hosios, Arthur J, 1990. "On the Efficiency of Matching and Related Models of Search and Unemployment," Review of Economic Studies, Wiley Blackwell, vol. 57(2), pages 279-98, April.
  18. Manuel Toledo & Jose I. Silva, 2005. "Labor Turnover Costs and the Cyclical Behavior of Vacancies and Unemployment," 2005 Meeting Papers 775, Society for Economic Dynamics.
  19. Rob Valletta, 2005. "Help-wanted advertising and job vacancies," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, issue jan21.
  20. Gabriele Cardullo, 2010. "Matching Models Under Scrutiny: An Appraisal Of The Shimer Puzzle," Journal of Economic Surveys, Wiley Blackwell, vol. 24(4), pages 622-656, 09.
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