Passive Search and Jobless Recoveries

Alexey Gorn

No 202113, Working Papers from University of Liverpool, Department of Economics

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

Keywords: unemployment; passive search; jobless recoveries; on-the-job search (search for similar items in EconPapers)
JEL-codes: E24 E32 J62 J63 J64 (search for similar items in EconPapers)
Pages: 49 pages
New Economics Papers: this item is included in nep-dge and nep-mac
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Forthcoming

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Persistent link: https://EconPapers.repec.org/RePEc:liv:livedp:202113

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