Job Duration and Match Characteristics over the Business Cycle

Ismail Baydur () and Toshihiko Mukoyama

Review of Economic Dynamics, 2020, vol. 37, 33-53

Abstract: This paper studies the cyclical behavior of job separation and the characteristics of matches between workers and jobs. We estimate a proportional hazard model with competing risks, distinguishing between different types of separations. A higher unemployment rate at the start of an employment relationship increases the probability of job-to-job transitions, whereas its effect on employment-to-unemployment transitions is negative. We then build a simple job-ladder model to interpret our empirical results. A model with two-dimensional heterogeneity in match (job) characteristics has the same qualitative features as the data. Once the model is calibrated to include cyclicality in the offered match characteristics, it can also fit the quantitative features of the data. The model reveals matches formed in booms provide more nonwage utility to the workers but are subject to a higher future probability of separation shocks. (Copyright: Elsevier)

Keywords: Business cycles; Match characteristics; Job duration; Unemployment; Job-to-job transitions (search for similar items in EconPapers)
JEL-codes: E24 E32 J22 J63 J64 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (3)

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DOI: 10.1016/j.red.2020.01.003

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