The Cyclical Behavior of Equilibrium Unemployment and Vacancies Revisited

Hagedorn, Marcus; Manovskii, Iourii

doi:10.1257/aer.98.4.1692

Cited by 973 publications

(1,529 citation statements)

References 62 publications

(73 reference statements)

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“…Given that the relative volatility of the total outflow rate is determined by the relative volatility of the match surplus to productivity shocks (Hagedorn & Manovskii 2008), the model predicts, consistently with the data, that the relative volatility of the total outflow rate is similar across countries. On the other hand, the rise in the surplus size reduces the incentives to separate after a negative technology shock.…”

Section: Discussionsupporting

confidence: 60%

“…The non-steady state approach has been applied to French data by Hairault et al (2012). that low matching efficiency leaves the relative volatility of the match surplus unchanged, while the calibration with high unemployment benefits and high firing costs increases the relative volatility of the match surplus -which causes the counterfactual amplification in the outflow rate (following the argument made by Hagedorn & Manovskii 2008). Moreover, we note that other potential sources, e.g.…”

Section: Introductionmentioning

confidence: 76%

“…Thus, by the same reasoning as under low matching efficiency, the rise in the absolute volatility of the match surplus amplifies the relative volatility of the total inflow rate. On the other hand, the rise in the relative volatility of the match surplus generates a counterfactual amplification in the relative volatility of the total outflow rate (again, following the argument by Hagedorn & Manovskii 2008). For this reason, a job matching model calibrated with high unemployment benefits and high firing costs is unable to qualitatively match the data.…”

Section: Discussionmentioning

confidence: 99%

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The Aggregate Effects of the Hartz Reforms in Germany

Hertweck

Sigrist

2013

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractThis paper quantifies the impact of the Hartz reforms on matching efficiency, using monthly SOEP gross worker flows . We show that, until the early 2000s, close to 60% of changes in the unemployment rate are due to changes in the inflow rate (job separation). On the contrary, since the implementation of the reforms in the mid-2000s, the importance of the outflow rate (job finding) has been steadily increasing. This indicates that matching efficiency has improved substantially in recent years. Results from an estimated matching function -pointing to efficiency gains of more than 20% -corroborate this finding. JEL Classifications: E24, E32, J63, J64

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Section: Discussionsupporting

confidence: 60%

Section: Introductionmentioning

confidence: 76%

Section: Discussionmentioning

confidence: 99%

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The Aggregate Effects of the Hartz Reforms in Germany

Hertweck

Sigrist

2013

SSRN Journal

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“…In our model, we distinguish between non-participation and unemployment and think only non-participants can fully enjoy leisure. Note that our calibration is di¤erent from the calibration of Hagedorn and Manovskii (2008)-high b and low -and hence we will not be able to explain the cyclical properties of labor market tightness. It is worthwhile noting that our key results on long-run productivity e¤ects and the sectoral allocation of workers are robust to changes along this dimension.…”

Section: Parameters From Other Studiesmentioning

confidence: 93%

Employment Protection, Technology Choice, and Worker Allocation

2011

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Using a country-industry panel dataset (EUKLEMS) we uncover a robust empirical regularity, namely that high-risk innovative sectors are relatively smaller in countries with strict employment protection legislation (EPL). To understand the mechanism, we develop a two-sector matching model where …rms endogenously choose between a safe technology with known productivity and a risky technology with productivity subject to sizeable shocks. Strict EPL makes the risky technology relatively less attractive because it is more costly to shed workers upon receiving a low productivity draw. We calibrate the model using a variety of aggregate, industry and micro-level data sources.We then simulate the model to re ‡ect both the observed di¤erences across countries in EPL and the observed increase since the mid-1990s in the variance of …rm performance associated with the adoption of information and communication technology. The simulations produce a di¤erential response to the Acknowledgements: We would like to thank Wouter den Haan, Egbert Jongen, Roland Luttens, Marcel Jansen, participants of CAED, Tokyo and ECB/CEPR Labour Market Workshop, Frankfurt as well as seminar participants at the University of Copenhagen, CPB, the Tinbergen Institute, VU Universiy, University of Maastricht and Nederlandsche Bank for useful comments and suggestions. 1 arrival of risky technology between low-and high-EPL countries that coincides with the …ndings in the data. The described mechanism can explain a considerable portion of the slowdown in productivity in the EU relative to the US since 1995.

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“…7 Hall (2005) (wage stickiness) and Hagedorn and Manovskii (2008) (the high value of unemployment) have offered explanations to counter Shimer's finding, and can indeed create labor market volatility from small productivity shocks. We do not see our main contribution in adding to this debate.…”

Section: Introductionmentioning

confidence: 99%

Unemployment cycles

Lindenlaub¹,

Eeckhout²

2015

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The labor market by itself can create cyclical outcomes, even in the absence of exogenous shocks.We propose a theory that shows that 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: active search changes the number of searchers and the duration of a job, and in the presence of sorting, it improves the quality of the pool of searchers. More vacancy posting in turn makes costly on-the-job search more attractive, a self-fulfilling belief. The absence of on-the-job search discourages vacancy posting, rendering costly on-the-job search unattractive.This model of multiple equilibria can account for large fluctuations in vacancies, unemployment, and job-to-job transitions; it provides a rationale for the Jobless Recovery through a novel channel of the employed searchers crowding out the unemployed; and it gives rise to a shift in the Beveridge Curve (the unemployment-vacancy locus). Each of these phenomena is matched in the data.

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The Cyclical Behavior of Equilibrium Unemployment and Vacancies Revisited

Cited by 973 publications

References 62 publications

The Aggregate Effects of the Hartz Reforms in Germany

The Aggregate Effects of the Hartz Reforms in Germany

Employment Protection, Technology Choice, and Worker Allocation

Unemployment cycles

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