Jobs and Matches: Quits, Replacement Hiring, and Vacancy Chains

Yusuf Mercan and Benjamin Schoefer

American Economic Review: Insights, 2020, vol. 2, issue 1, 101-24

Abstract: In the canonical DMP model of job openings, all job openings stem from new job creation. Jobs denote worker-firm matches, which are destroyed following worker quits. Yet, employers classify 56 percent of vacancies as quit-driven replacement hiring into old jobs, which evidently outlived their previous matches. Accordingly, aggregate and firm-level hiring tightly track quits. We augment the DMP model with longer-lived jobs arising from sunk job creation costs and replacement hiring. Quits trigger vacancies, which beget vacancies through replacement hiring. This vacancy chain can raise total job openings and net employment. The procyclicality of quits can thereby amplify business cycles.

JEL-codes: E24 E32 J23 J31 J63 (search for similar items in EconPapers)
Date: 2020
References: Add references at CitEc
Citations: View citations in EconPapers (16)

Downloads: (external link)
https://www.aeaweb.org/doi/10.1257/aeri.20190023 (application/pdf)
https://www.aeaweb.org/doi/10.1257/aeri.20190023.data (application/zip)
https://www.aeaweb.org/doi/10.1257/aeri.20190023.appx (application/pdf)
https://www.aeaweb.org/doi/10.1257/aeri.20190023.ds (application/zip)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
Working Paper: Jobs and Matches: Quits, Replacement Hiring, and Vacancy Chains (2019)
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:aea:aerins:v:2:y:2020:i:1:p:101-24

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

DOI: 10.1257/aeri.20190023

Access Statistics for this article

American Economic Review: Insights is currently edited by Amy Finkelstein

More articles in American Economic Review: Insights from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().