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Jel Classification:J64 

Discussion Paper
Introducing the Unemployment Claims Monitor

The COVID-19 pandemic has caused an unparalleled economic slowdown and record numbers of layoffs. Even casual economic observers have seen reports of millions of workers filing claims for unemployment insurance—between the weeks of March 21, 2020 and April 25, 2020, 19 percent of workers covered by unemployment insurance filed an initial claim—but what exactly does this mean for unemployment?1 It is important to understand exactly what an unemployment insurance (UI) claim represents and how it provides information on what is happening in the economy.
Workforce Currents , Paper 2020-04

Working Paper
Endogenous Labor Supply in an Estimated New-Keynesian Model: Nominal versus Real Rigidities

The deep deterioration in the labor market during the Great Recession, the subsequent slow recovery, and the missing disinflation are hard to reconcile for standard macroeconomic models. We develop and estimate a New-Keynesian model with financial frictions, search and matching frictions in the labor market, and endogenous intensive and extensive labor supply decisions. We conclude that the estimated combination of the low degree of nominal wage rigidities and high degree of real wage rigidities, together with the small role of pre-match costs relative to post-match costs, are key in ...
Finance and Economics Discussion Series , Paper 2023-069

Working Paper
Vacancy Chains

Replacement hiring—recruitment that seeks to replace positions vacated by workers who quit—plays a central role in establishment dynamics. We document this phenomenon using rich microdata on U.S. establishments, which frequently report no net change in their employment, often for years at a time, despite facing substantial gross turnover in the form of quits. We devise a tractable model in which replacement hiring is driven by a novel structure of frictions, combining firm dynamics, on-the-job search, and investments into job creation that are sunk at the point of replacement. A key ...
Working Papers , Paper 22-23

Working Paper
Optimal Unemployment Insurance and International Risk Sharing

We discuss how cross-country unemployment insurance can be used to improve international risk sharing. We use a two-country business cycle model with incomplete financial markets and frictional labor markets where the unemployment insurance scheme operates across both countries. Cross-country insurance through the unemployment insurance system can be achieved without affecting unemployment outcomes. The Ramsey-optimal policy however prescribes a more countercyclical replacement rate when international risk sharing concerns enter the unemployment insurance trade-off. We calibrate our model to ...
Finance and Economics Discussion Series , Paper 2016-054

Discussion Paper
Job Seekers’ Beliefs and the Causes of Long-Term Unemployment

In addition to its terrible human toll, the COVID-19 pandemic has also caused massive disruption in labor markets. In the United States alone, more than 25 million people lost their jobs during the first wave of the pandemic. While many have returned to work since then, a large number have remained unemployed for a prolonged period of time. The number of long-term unemployed (defined as those jobless for twenty-seven weeks or longer) has surged from 1.1 million to almost 4 million. An important concern is that the long-term unemployed face worse employment prospects, but prior work has ...
Liberty Street Economics , Paper 20210129

Working Paper
Estimating Duration Dependence on Re-employment Wages When Reservation Wages Are Binding

This paper documents a novel finding indicating that re-employment wages are elastic to the level of unemployment insurance (i.e., a binding reservation wage) and adapts the IV estimator for duration dependence in Schmieder et al. (2016) to account for this fact. Using administrative data from Spain, we find that unemployed workers lower their re-employment wages by 3 percent immediately after the exhaustion of unemployment insurance (UI) benefits. Workers’ characteristics and permanent unobserved heterogeneity cannot explain this. To estimate duration dependence, we extend the IV framework ...
Working Papers , Paper 23-21

Report
Do informal referrals lead to better matches? Evidence from a firm's employee referral system

The limited nature of data on employment referrals in large business and household surveys has so far limited our understanding of the relationships among employment referrals, match quality, wage trajectories, and turnover. Using a new, firm-level data set that includes explicit information on whether a worker was referred by a current employee of the company, we are able to provide rich detail on these empirical relationships for a single U.S. corporation, and to test various predictions of theoretical models of labor market referrals. Predictions with which our results align include: 1) ...
Staff Reports , Paper 568

Journal Article
A Slowdown in Job Vacancies Is Likely to Coincide with Higher Unemployment and Slower Wage Growth

Recently, some market observers have proposed that job vacancies could decline, and ease wage growth, without a commensurate increase in the unemployment rate. However, we find that the typical relationship of declining job vacancies and higher unemployment holds even at exceptionally low levels of the unemployment rate. A notable decline in job postings will likely coincide with an easing of tightness in the labor market, a higher unemployment rate, and slowing wage growth.
Economic Bulletin , Issue August 10, 2022 , Pages 4

Working Paper
The Dual Beveridge Curve

This study introduces a dual vacancy model to explain the recent anomalous behavior of the Beveridge curve. The model proposes that job vacancies are partitioned into two categories, one for the unemployed and the other for job-to-job transitions, and that they function in separate markets. We estimate the monthly numbers of both job vacancy types for the U.S. economy and its subsectors starting from 2000 and find a significant surge in poaching vacancies in the mid-2010s. Our analysis indicates that the dual vacancy model provides a better fit to the data than traditional models. These ...
Working Papers , Paper 2022-021

Report
The Cyclicality of the Opportunity Cost of Employment

The flow opportunity cost of moving from unemployment to employment consists of foregone public benefits and the foregone value of non-working time in units of consumption. We construct a time series of the opportunity cost of employment using detailed microdata and administrative or national accounts data to estimate benefit levels, eligibility and take-up of benefits, consumption by labor force status, hours per worker, taxes, and preference parameters. Our estimated opportunity cost is procyclical and volatile over the business cycle. The estimated cyclicality implies far less unemployment ...
Staff Report , Paper 514

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Birinci, Serdar 22 items

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