Unemployment and Endogenous Reallocation over the Business Cycle

Carlos Carrillo-Tudela and Ludo Visschers

No 13307, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper studies the extent to which the cyclicality of gross and net occupational mobility shapes that of aggregate unemployment and its duration distribution. Using the SIPP, we document the relation between workers' (gross and net) occupational mobility and unemployment duration over the long run and business cycle. To interpret this evidence, we develop an analytically and computationally tractable stochastic equilibrium model with heterogenous agents and occupations as well as aggregate uncertainty. The model is quantitatively consistent with several important features of the US labor market: procyclical gross and countercyclical net occupational mobility, the large volatility of unemployment and the cyclical properties of the unemployment duration distribution, among others. Our analysis shows that "excess" occupational mobility due to workers' changing career prospects interacts with aggregate conditions to drive fluctuations of aggregate unemployment and its duration distribution.

Keywords: unemployment; business cycle; rest; search; occupational mobility (search for similar items in EconPapers)
JEL-codes: E24 E30 J62 J63 J64 (search for similar items in EconPapers)
Pages: 106 pages
Date: 2020-05
New Economics Papers: this item is included in nep-dge, nep-lab, nep-mac and nep-ore
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

Published - published in: Econometrica, 2021, 91 (3), 1119-1153

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https://docs.iza.org/dp13307.pdf (application/pdf)

Related works:
Journal Article: Unemployment and Endogenous Reallocation Over the Business Cycle (2023)
Working Paper: Unemployment and Endogenous Reallocation over the Business Cycle (2023)
Working Paper: Unemployment and Endogenous Reallocation over the Business Cycle (2021)
Working Paper: Unemployment and Endogenous Reallocation over the Business Cycle (2020)
Working Paper: Unemployment and Endogenous Reallocation over the Business Cycle (2020)
Working Paper: Unemployment and endogenous reallocation over the business cycle (2014)
Working Paper: Unemployment and Endogenous Reallocation over the Business Cycle (2014)
Working Paper: Unemployment and Endogenous Reallocation over the Business Cycle (2014)
Working Paper: Unemployment and Endogenous Reallocation over the Business Cycle (2013)
Working Paper: Unemployment and endogenous reallocation over the business cycle (2013)
Working Paper: Unemployment and endogenous reallocation over the business cycle (2013)
Working Paper: Unemployment and Endogenous Reallocation over the Business Cycle (2013)
Working Paper: Unemployment and Endogenous Reallocation over the Business Cycle (2012)
Working Paper: Unemployment and Endogenous Reallocation over the Business Cycle (2012)
Working Paper: Unemployment and Endogenous Reallocation over the Business Cycle (2011)
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