Efficient Search on the Job and the Business Cycle

Guido Menzio and Shouyong Shi

Working Papers from University of Toronto, Department of Economics

Abstract: The paper develops a model of directed search on the job where transitions of workers between unemployment, employment and across employers are driven by heterogeneity in the quality of firm-worker matches. The equilibrium is such that the agents' value and policy functions are independent of the distribution of workers across employment states. Hence, the model can be solved outside of steady-state and used to measure the effect of cyclical productivity shocks on the labor market. Productivity shocks are found to generate large fluctuations in workers' transitions, unemployment and vacancies when matches are experience good, but not when matches are inspection goods.

Keywords: Directed search; On the Job Search; Business Cycles; Unemployment (search for similar items in EconPapers)
JEL-codes: E24 E32 J64 (search for similar items in EconPapers)
Pages: Unknown pages
Date: 2011-06-19
New Economics Papers: this item is included in nep-bec, nep-dge, nep-lab and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (189)

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https://www.economics.utoronto.ca/public/workingPapers/tecipa-437.pdf Main Text (application/pdf)

Related works:
Journal Article: Efficient Search on the Job and the Business Cycle (2011)
Working Paper: Efficient Search on the Job and the Business Cycle (2009)
Working Paper: Efficient Search on the Job and the Business Cycle (2008)
Working Paper: Efficient Search on the Job and the Business Cycle (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:tor:tecipa:tecipa-437

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