Endogenous Separations, Wage Rigidities and Employment Volatility

Mikael Carlsson and Andreas Westermark

No 2016:12, Working Paper Series from Uppsala University, Department of Economics

Abstract: We show that in micro data, as well as in a search and matching model with endogenous separations and rigid wages, separations and hence employment volatility are non-neutral to wage rigidities of incumbent workers. In contrast to when all wages are flexible, the standard deviation of unemployment in a model with rigid wages for incumbent workers (only) matches the standard deviation in the data. Thus, the degree of wage rigidity for newly hired workers is not a sufficient statistic for determining the effect of wage rigidities on macroeconomic outcomes in this class of models.

Keywords: Search and matching; Unemployment volatility puzzle; Wage rigidities; Job De-struction (search for similar items in EconPapers)
JEL-codes: E30 J63 J64 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2016-08-30
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://uu.diva-portal.org/smash/get/diva2:956502/FULLTEXT02.pdf (application/pdf)

Related works:
Journal Article: Endogenous Separations, Wage Rigidities, and Unemployment Volatility (2022)
Working Paper: Endogenous Separations, Wage Rigidities and Employment Volatility (2020)
Working Paper: Endogenous Separations, Wage Rigidities and Unemployment Volatility (2018)
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:hhs:uunewp:2016_012

Access Statistics for this paper

More papers in Working Paper Series from Uppsala University, Department of Economics Department of Economics, Uppsala University, P. O. Box 513, SE-751 20 Uppsala, Sweden. Contact information at EDIRC.
Bibliographic data for series maintained by Ulrika Öjdeby ().