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Federal Reserve Bank of Philadelphia
Working Papers
Worker flows and job flows: a quantitative investigation
Shigeru Fujita
Makoto Nakajima

This paper studies quantitative properties of a multiple-worker firm search/matching model and investigates how worker transition rates and job flow rates are interrelated. We show that allowing for job-to-job transitions in the model is essential to simultaneously account for the cyclical features of worker transition rates and job flow rates. Important to this result are the distinctions between the job creation rate and the hiring rate and between the job destruction rate and the layoff rate. In the model without job-to-job transitions, these distinctions essentially disappear, thus making it impossible to simultaneously replicate the cyclical features of both labor market flows.

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Shigeru Fujita & Makoto Nakajima, Worker flows and job flows: a quantitative investigation, Federal Reserve Bank of Philadelphia, Working Papers 16-3, 05 Feb 2016.
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Keywords: Job flows; Worker flows; Multiple-worker firm; and Search and matching
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