Search, Shirking and Labor Market Volatility

Christopher Martin and Bingsong Wang

No 56/16, Department of Economics Working Papers from University of Bath, Department of Economics

Abstract: This paper proposes a modified version of the standard search and matching model of the labour market that includes a shirking mechanism. We show that our model delivers a close match to the simulated volatilities, correlations and autocorrelations of unemployment, vacancies, labour market tightness and the job finding rate with values observed in US data. In doing so, it outperforms prominent alternative models. Our model also has novel policy implications for the impact of income taxes, subsidies on hiring and employment taxes on unemployment and its volatility.

Date: 2016-10-24
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https://purehost.bath.ac.uk/ws/files/158386094/sea ... arket_volatility.pdf Accepted author manuscript (application/pdf)

Related works:
Journal Article: Search, shirking and labor market volatility (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:eid:wpaper:52882

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