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Passive Search and Jobless Recoveries

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  • Alexey Gorn

Abstract

For employed workers, passive search is as important as active search. Passive search implies costly poaching by firms. I introduce poaching and passive search into a random matching model of the labor market. In the model, some firms switch from poaching to vacancy posting in recessions. Employed workers respond by increasing active search. By doing so, they crowd out unemployed workers both amplifying and propagating the reaction of unemployment to aggregate shocks. This mechanism can explain the counter-cyclicality of relative on-the-job search inferred from aggregate data. I provide cross-state empirical evidence supporting the mechanism

Suggested Citation

  • Alexey Gorn, "undated". "Passive Search and Jobless Recoveries," Working Papers 202113, University of Liverpool, Department of Economics.
    • Handle: RePEc:liv:livedp:202113
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    File URL: https://www.liverpool.ac.uk/media/livacuk/schoolofmanagement/research/economics/WP202113.pdf
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    References listed on IDEAS

    as
    1. John C. Haltiwanger & Henry R. Hyatt & Lisa B. Kahn & Erika McEntarfer, 2018. "Cyclical Job Ladders by Firm Size and Firm Wage," American Economic Journal: Macroeconomics, American Economic Association, vol. 10(2), pages 52-85, April.
    2. Robert G. Valletta, 2018. "Recent Flattening in the Higher Education Wage Premium: Polarization, Skill Downgrading, or Both?," NBER Chapters, in: Education, Skills, and Technical Change: Implications for Future US GDP Growth, pages 313-342, National Bureau of Economic Research, Inc.
    3. Brad Hershbein & Lisa B. Kahn, 2018. "Do Recessions Accelerate Routine-Biased Technological Change? Evidence from Vacancy Postings," American Economic Review, American Economic Association, vol. 108(7), pages 1737-1772, July.
    4. Mark Gertler & Antonella Trigari, 2009. "Unemployment Fluctuations with Staggered Nash Wage Bargaining," Journal of Political Economy, University of Chicago Press, vol. 117(1), pages 38-86, February.
    5. Evan Starr, 2019. "Consider This: Training, Wages, and the Enforceability of Covenants Not to Compete," ILR Review, Cornell University, ILR School, vol. 72(4), pages 783-817, August.
    6. Mitman, Kurt & Rabinovich, Stanislav, 2019. "Do Unemployment Benefit Extensions Explain the Emergence of Jobless Recoveries?," IZA Discussion Papers 12365, Institute of Labor Economics (IZA).
    7. Alexey Gorn, 2021. "The Role of Headhunters in Wage Inequality: It's All about Matching," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 40, pages 309-346, April.
    8. Robert Shimer, 2005. "The Cyclical Behavior of Equilibrium Unemployment and Vacancies," American Economic Review, American Economic Association, vol. 95(1), pages 25-49, March.
    9. Carlos Carrillo-Tudela & Bart Hobijn & Patryk Perkowski & Ludo Visschers, 2015. "Majority of hires never report looking for a job," FRBSF Economic Letter, Federal Reserve Bank of San Francisco.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    unemployment; passive search; jobless recoveries; on-the-job search;
    All these keywords.

    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
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • 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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