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  3. American Economic Journal: Macroeconomics
  4. January 2013
  5. Marginal Jobs, Heterogeneous Firms, and Unemployment Flows

Marginal Jobs, Heterogeneous Firms, and Unemployment Flows

  • Michael W. L. Elsby
  • Ryan Michaels
American Economic Journal: Macroeconomics
vol. 5, no. 1, January 2013
(pp. 1-48)
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Abstract

This paper introduces a notion of firm size into a search and matching model with endogenous job destruction. The outcome is a rich, yet analytically tractable framework that can be used to analyze a broad set of features of both the cross-section and aggregate dynamics of the labor market. The model provides a coherent account of the distributions of employer size and employment growth across establishments, the amplitude and propagation of cyclical fluctuations in worker flows, the negative comovement of unemployment and vacancies, and the dynamics of the distribution of employer size over the business cycle. (JEL E24, E32, J63, J64)

Citation

Elsby, Michael W. L., and Ryan Michaels. 2013. "Marginal Jobs, Heterogeneous Firms, and Unemployment Flows." American Economic Journal: Macroeconomics, 5 (1): 1-48. DOI: 10.1257/mac.5.1.1

Additional Materials

JEL Classification

  • E24 Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital
  • E32 Business Fluctuations; Cycles
  • J63 Labor Turnover; Vacancies; Layoffs
  • J64 Unemployment: Models, Duration, Incidence, and Job Search
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