Marginal Jobs, Heterogeneous Firms, and Unemployment Flows

Michael Elsby and Ryan Michaels

American Economic Journal: Macroeconomics, 2013, vol. 5, issue 1, 1-48

Abstract: This paper introduces a notion of firm size into a search and matching model with endogenous job destruction. The outcome is a rich, yet analytically tractable framework that can be used to analyze a broad set of features of both the cross-section and aggregate dynamics of the labor market. The model provides a coherent account of the distributions of employer size and employment growth across establishments, the amplitude and propagation of cyclical fluctuations in worker flows, the negative comovement of unemployment and vacancies, and the dynamics of the distribution of employer size over the business cycle. (JEL E24, E32, J63, J64)

JEL-codes: E24 E32 J63 J64 (search for similar items in EconPapers)
Date: 2013
Note: DOI: 10.1257/mac.5.1.1
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Citations: View citations in EconPapers (100)

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