Equilibrium Job Turnover and the Business Cycle

Carlos Carrillo-Tudela, Alex Clymo and Melvyn Coles (mcole@essex.ac.uk)
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Melvyn Coles: University of Essex

No 14869, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper develops and estimates a fully microfounded equilibrium business cycle model of the US labor market with aggregate productivity shocks. Those microfoundations are consistent with evidence regarding the underlying distribution of firm growth rates across firms [by age and size] and, when aggregated, are consistent with macro-evidence regarding gross job creation and job destruction flows over the cycle. By additionally incorporating on-the-job search, we systematically characterise the stochastic relationships between aggregate job creation and job destruction flows across firms, gross hire and quit flows [churning] by workers across firms, as well as the persistence and volatility of unemployment and worker job finding rates over the cycle.

Keywords: business cycle; firm dynamics; job search (search for similar items in EconPapers)
JEL-codes: E24 E32 J62 J63 (search for similar items in EconPapers)
Pages: 67 pages
Date: 2021-11
New Economics Papers: this item is included in nep-bec, nep-cwa, nep-dge, nep-lab and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Working Paper: Equilibrium Job Turnover and the Business Cycle (2021)
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