Understanding Labour Market Frictions: A Tobin’s Q Approach

Parantap Basu

No 35, Money Macro and Finance (MMF) Research Group Conference 2006 from Money Macro and Finance Research Group

Abstract: Labour market friction is viewed as the Tobin’s Q of an employed worker as opposed to the position of the Beveridge curve. This Tobin’s Q is inversely proportional to the average quality of the match between employers and workers. Based on this measure, I find that the labour market friction has a procyclical trend in the US, which is indicative of the fact that firms compromise on the quality of the skill match during an expansion.

Keywords: Intangible Capital; Skill matching; Human capital (search for similar items in EconPapers)
JEL-codes: D92 G12 (search for similar items in EconPapers)
Date: 2007-02-02
New Economics Papers: this item is included in nep-lab
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Persistent link: https://EconPapers.repec.org/RePEc:mmf:mmfc06:35

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