On the cyclical behavior of employment, unemployment and labor force participation

Marcelo Veracierto

Journal of Monetary Economics, 2008, vol. 55, issue 6, 1143-1157

Abstract: In this paper I evaluate to what extent a real business cycle (RBC) model that incorporates search and home production decisions can simultaneously account for the observed behavior of employment, unemployment and out-of-the-labor-force. This contrasts with the previous RBC literature, which analyzed employment or hours fluctuations either by lumping together unemployment and out-of-the-labor-force into a single non-employment state or by assuming a fixed labor force. Once the three employment states are explicitly introduced I find that the RBC model generates highly counterfactual labor market dynamics.

Keywords: Business; cycles; Employment; Unemployment; Labor; force; participation (search for similar items in EconPapers)
Date: 2008
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Working Paper: On the cyclical behavior of employment, unemployment and labor force participation (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:moneco:v:55:y:2008:i:6:p:1143-1157

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