Replication data for: Unemployment Cycles
Principal Investigator(s): View help for Principal Investigator(s) Jan Eeckhout; Ilse Lindenlaub
Version: View help for Version V1
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Project Citation:
Eeckhout, Jan, and Lindenlaub, Ilse. Replication data for: Unemployment Cycles. Nashville, TN: American Economic Association [publisher], 2019. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-12-07. https://doi.org/10.3886/E116422V1
Project Description
Summary:
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The labor market by itself can create cyclical outcomes, even in the absence of exogenous shocks. We propose a theory in which the search behavior of the employed has profound aggregate implications for the unemployed. There is a strategic complementarity between active on-the-job search and vacancy posting by firms, which leads to multiple equilibria: in the presence of sorting, active on-the-job search improves the quality of the pool of searchers. This encourages vacancy posting, which in turn makes costly on-the-job search more attractive—a self-fulfilling equilibrium. The model provides a rationale for the Jobless Recovery, the outward shift of the Beveridge curve during the boom and for pro-cyclical frictional wage dispersion. Central to the model's mechanism is the fact that the employed crowd out the unemployed when on-the-job search picks up during recovery. We also illustrate this mechanism in a stylized calibration exercise.
Scope of Project
JEL Classification:
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E24 Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
E32 Business Fluctuations; Cycles
J63 Labor Turnover; Vacancies; Layoffs
J64 Unemployment: Models, Duration, Incidence, and Job Search
E24 Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
E32 Business Fluctuations; Cycles
J63 Labor Turnover; Vacancies; Layoffs
J64 Unemployment: Models, Duration, Incidence, and Job Search
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