EconPapers    
Economics at your fingertips  
 

Income Effects and the Cyclicality of Job Search Effort

Alper Çenesiz () and Luís Guimarães ()
Additional contact information
Luís Guimarães: cef.up, Faculdade de Economia, Universidade do Porto

CEF.UP Working Papers from Universidade do Porto, Faculdade de Economia do Porto

Abstract: The canonical matching model predicts procyclical job search effort while the evidence suggests otherwise. In this paper, we assess whether introducing income effects into a model with matching frictions leads to acyclical or countercyclical job search effort as in data. We find that income effects improve the cyclical behavior of job search effort because they make the value of leisure procyclical. But the procyclicality of the value of leisure also magnifies the procyclicality of the wage. Unless we make unsound assumptions to mute this effect on the wage, the model generates either acyclical or procyclical unemployment. Thus, our paper casts doubt on the role of income effects in generating cyclical patterns of job search effort consistent with the data.

Keywords: Matching Frictions; Job Search Effort; Income Effects. (search for similar items in EconPapers)
JEL-codes: E24 E32 J64 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2018-05, Revised 2019-04
New Economics Papers: this item is included in nep-dge, nep-lab and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://cefup.fep.up.pt/uploads/WorkingPapers/wp1803.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://cefup.fep.up.pt/uploads/WorkingPapers/wp1803.pdf [301 Moved Permanently]--> https://cefup.fep.up.pt/uploads/WorkingPapers/wp1803.pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:por:cetedp:1803

Access Statistics for this paper

More papers in CEF.UP Working Papers from Universidade do Porto, Faculdade de Economia do Porto Contact information at EDIRC.
Bibliographic data for series maintained by Ana Bonanca ().

 
Page updated 2025-03-19
Handle: RePEc:por:cetedp:1803