Postel-Vinay, Fabien;
Moscarini, Giuseppe;
(2024)
On the Job Search and Business Cycles.
Revue économique
, 75
(1)
pp. 73-112.
10.3917/reco.751.0073.
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Abstract
We propose a highly tractable way of analyzing business cycles in an environment with random job search both off- and on-the-job (OJS). Heterogeneity in productivity across jobs generates a job ladder. Firms Bertrand-compete for employed workers, as in the Sequential Auctions protocol of Postel-Vinay and Robin (2002). We identify three channels through which OJS amplifies and propagates aggregate shocks: (i) a higher estimated elasticity of the matching function when allowing for OJS; (ii) the differential returns to hiring employed and unemployed job applicants, whose proportions naturally vary over the business cycle; (iii) the slow reallocation of workers through OJS across rungs of the job ladder, generating endogenous, slowly evolving opportunities for further poaching, which feed back on job creation incentives.
| Type: | Article |
|---|---|
| Title: | On the Job Search and Business Cycles |
| Open access status: | An open access version is available from UCL Discovery |
| DOI: | 10.3917/reco.751.0073 |
| Publisher version: | http://doi.org/10.3917/reco.751.0073 |
| Language: | English |
| Additional information: | This version is the author accepted manuscript. For information on re-use, please refer to the publisher’s terms and conditions. |
| Keywords: | Equilibrium job search, Business cycle, Stochastic dynamics JEL Codes:J64, J31, D86 |
| UCL classification: | UCL UCL > Provost and Vice Provost Offices > UCL SLASH UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS > Dept of Economics |
| URI: | https://discovery.ucl.ac.uk/id/eprint/10173774 |
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