American Economic Journal:
Macroeconomics
ISSN 1945-7707 (Print) | ISSN 1945-7715 (Online)
The Weak Job Recovery in a Macro Model of Search and Recruiting Intensity
American Economic Journal: Macroeconomics
vol. 12,
no. 1, January 2020
(pp. 310–43)
Abstract
We show that cyclical fluctuations in search and recruiting intensity are quantitatively important for explaining the weak job recovery from the Great Recession. We demonstrate this result using an estimated labor search model that features endogenous search and recruiting intensity. Since the textbook model with free entry implies constant recruiting intensity, we introduce a cost of vacancy creation, so that firms respond to aggregate shocks by adjusting both vacancies and recruiting intensity. Fluctuations in search and recruiting intensity driven by shocks to productivity and the discount factor help bridge the gap between the actual and model-predicted job filling rate.Citation
Leduc, Sylvain, and Zheng Liu. 2020. "The Weak Job Recovery in a Macro Model of Search and Recruiting Intensity." American Economic Journal: Macroeconomics, 12 (1): 310–43. DOI: 10.1257/mac.20170176Additional Materials
JEL Classification
- E24 Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
- E32 Business Fluctuations; Cycles
- J41 Labor Contracts
- J63 Labor Turnover; Vacancies; Layoffs
- J64 Unemployment: Models, Duration, Incidence, and Job Search
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