Labor matching: putting the pieces together

Anton Cheremukhin

No 1102, Working Papers from Federal Reserve Bank of Dallas

Abstract: The original Mortensen-Pissarides model possesses two elements that are absent from the commonly used simplified version: the job destruction margin and training costs. I find that these two elements enable a model driven by a single aggregate shock to simultaneously explain most movements involving unemployment, vacancies, job destruction, job creation, the job finding rate and wages. The job destruction margin's role in propagating aggregate shocks is to create an additional pool of unemployed at the onset of a recession. The role of training costs is to explain the simultaneous decline in vacancies and slow response of job creation.

Keywords: Unemployment; Job creation; Employment; Business cycles (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-dge, nep-lab, nep-lma and nep-mac
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