Unemployment cycles

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• dc.contributor.author Eeckhout, Jan
• dc.contributor.author Lindenlaub, Ilse
• dc.date.accessioned 2020-09-25T09:13:37Z
• dc.date.available 2020-09-25T09:13:37Z
• dc.date.issued 2019
• dc.description.abstract 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.
• dc.description.sponsorship Eeckhout gratefully acknowledges support from the ERC, Grant 339186, from RecerCaixa 2013, and from the Spanish Government, Grant ECO2015-67655-P.
• dc.format.mimetype application/pdf
• dc.identifier.citation Eeckhout J, Lindenlaub I. Unemployment cycles. American Economic Journal: Macroeconomics. 2019 Oct;11(4):175-234. DOI: 10.1257/mac.20180105
• dc.identifier.doi http://dx.doi.org/10.1257/mac.20180105
• dc.identifier.issn 1945-7707
• dc.identifier.uri http://hdl.handle.net/10230/45340
• dc.language.iso eng
• dc.publisher American Economic Association
• dc.relation.ispartof American Economic Journal: Macroeconomics. 2019 Oct;11(4):175-234. DOI: 10.1257/mac.20180105
• dc.relation.projectID info:eu-repo/grantAgreement/EC/FP7/339186
• dc.relation.projectID info:eu-repo/grantAgreement/ES/1PE/ECO2015-67655-P
• dc.rights © American Economic Association. Can be found at https://doi.org/10.1257/mac.20180105
• dc.rights.accessRights info:eu-repo/semantics/openAccess
• dc.subject.other Aturats
• dc.subject.other Atur
• dc.subject.other Mercat de treball
• dc.subject.other Ocupació, Cerca d'
• dc.title Unemployment cycles
• dc.type info:eu-repo/semantics/article
• dc.type.version info:eu-repo/semantics/publishedVersion