Business Cycle Asymmetries and the Labor Market
Britta Kohlbrecher () and
Christian Merkl ()
No 9816, IZA Discussion Papers from Institute of Labor Economics (IZA)
This paper shows that the matching function and the Beveridge curve in the United States exhibit strong nonlinearities over the business cycle. These patterns can be replicated by enhancing a search and matching model with idiosyncratic productivity shocks for new contacts. Large negative aggregate shocks move the hiring cutoff point into a part of the idiosyncratic density function with higher density and thereby generate large, asymmetric job-finding rate and unemployment reactions. Our proposed mechanism is of high relevance as it leads to time varying effects of certain policy interventions.
Keywords: business cycle asymmetries; matching function; Beverdige curve; job-finding rate; unemployment; effectiveness of policy (search for similar items in EconPapers)
JEL-codes: E24 E32 J63 J64 (search for similar items in EconPapers)
Pages: 40 pages
New Economics Papers: this item is included in nep-dge, nep-lab and nep-mac
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Working Paper: Business cycle asymmetries and the labor market (2016)
Working Paper: Business Cycle Asymmetries and the Labor Market (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp9816
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