On-the-job search and the cyclical dynamics of the labor market

Michael Krause and Thomas Lubik

No 2007,15, Discussion Paper Series 1: Economic Studies from Deutsche Bundesbank

Abstract: We show how on-the-job search and the propagation of shocks to the economy are intricately linked. Rising search by employed workers in a boom amplifies the incentives of firms to post vacancies. In turn, more vacancies induce more on-the-job search. By keeping job creation costs low for firms, on-the-job search greatly amplifies shocks. In our baseline calibration, this allows the model to generate fluctuations of unemployment, vacancies, and labor productivity whose magnitudes are close to the data, and leads output to be highly autocorrelated.

Keywords: Search and matching; job-to-job mobility; worker flows; Beveridge curve; business cycle; propagation (search for similar items in EconPapers)
JEL-codes: E24 E32 J64 (search for similar items in EconPapers)
Date: 2007
New Economics Papers: this item is included in nep-dge, nep-lab and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (26)

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Related works:
Working Paper: On-the-job search and the cyclical dynamics of the labor market (2010)
Working Paper: On-the-job search and the cyclical dynamics of the labor market (2007)
Working Paper: On-the-Job Search and the Cyclical Dynamics of the Labor Market (2006)
Working Paper: On-the-job Search and the Cyclical Dynamics of the Labor Market (2005)
Working Paper: On-the-Job Search and the Cyclical Dynamics of the Labor Market (2004)
Working Paper: On-the-job Search and the Cyclical Dynamics of the Labor Market (2004)
Working Paper: On-the-job Search and the Cyclical Dynamics of the Labor Market (2004)
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