Discussion Paper
Why Is the Job-Finding Rate Still Low?
Abstract: Fluctuations in unemployment are mostly driven by fluctuations in the job-finding prospects of unemployed workers?except at the onset of recessions, according to various research papers (see, for example, Shimer [2005, 2012] and Elsby, Hobijn, and Sahin [2010]). With job losses back to their pre-recession levels, the job-finding rate is arguably one of the most important indicators to watch. This rate?defined as the fraction of unemployed workers in a given month who find jobs in the consecutive month?provides a good measure of how easy it is to find jobs in the economy. The chart below presents the job-finding rate starting from 1990. Clearly, the job-finding rate is still substantially below its pre-recession levels, suggesting that it is still difficult for the unemployed to find work. In this post, we explore the underlying reasons behind the low job-finding rate.
Keywords: job-finding rates; labor markets; matching function; match efficiency;
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Bibliographic Information
Provider: Federal Reserve Bank of New York
Part of Series: Liberty Street Economics
Publication Date: 2014-02-19
Number: 20140219