Search Results
Journal Article
A missing bogeyman
County employment shocks and recoveries show a wide diversity of sources
Working Paper
The importance of employer-to-employer flows in the U.S. labor market
In order to measure the flexibility of the labor market, evaluate the job-worker matching process, and model business-cycle dynamics, economists have studied the flows of workers across the labor market states of employment, unemployment, and not in the labor force. One important flow that has been poorly measured is the movement of workers from one employer to another without any significant intervening period of nonemployment. This paper exploits the "dependent interviewing" techniques used in the Current Population Survey since 1994 to estimate such flows. We find that they are large, ...
Working Paper
Firm and Worker Dynamics in an Aging Labor Market
I develop an idea flows theory of firm and worker dynamics in order to assess the consequences of population aging. Older people are less likely to attempt entrepreneurship and switch employers because they have found better jobs. Consequently, aging reduces entry and worker mobility through a composition effect. In equilibrium, the lower entry rate implies fewer new, better job opportunities for workers, while the better matched labor market dissuades job creation and entry. Aging accounts for a large share of substantial declines in firm and worker dynamics since the 1980s, primarily due to ...
Discussion Paper
The cyclical behavior of job creation and job destruction: a sectoral model
Three key features of the employment process in the U.S. economy are that job creation is procyclical, job destruction is countercyclical, and job creation is less volatile than job destruction. These features are also found at the sectoral (goods and services) level. The paper develops, calibrates, and simulates a two sector general equilibrium model including both aggregate and sectoral shocks. The behavior of the model economy mimics the job creation and destruction facts. Sectoral shocks play a significant role in determining the aggregate level of nonemployment.
Journal Article
Methodology: a county slice in time
Working Paper
Declining job security
Although common belief and recent evidence point to a decline in "job security," the academic literature to date has been noticeably silent regarding the behavioral underpinnings of declining job security. In this paper, I define job security in the context of implicit contracts designed to overcome incentive problems in the employment relationship. Contracts of this nature imply the possibility of inefficient separations in response to adverse shocks, and they generate predictions concerning the relationship between job security parameters-such as worker seniority, aggregate shocks, and ...
Working Paper
Valuable jobs and uncertainty
Little attention has been given to the link between variation in a firm's circumstances and the resolution of agency problems that pervade the relationship between a firm and its employees. We construct stochastic versions of standard efficiency-wage and performance-bonding models and find that this connection has important and apparently inescapable consequences. Compensation levels depend on characteristics of the firm. The possibility of the firm's exit drive an important counterfactual prediction in both classes of model: compensation rises in dying firms. This result illustrates the need ...
Journal Article
Job shock: when lightning threatens again
Working Paper
The labor wedge as a matching friction
The labor wedge accounts for a large fraction of business cycle fluctuations. This paper uses a search and matching model to decompose the labor wedge into three classes of labor market frictions and evaluate their role. We find that frictions to job destruction and bargaining commonly considered in the search literature are not helpful in explaining the labor wedge. We also identify an asymmetric effect of separation, bargaining and matching frictions on unemployment, as well as a potential solution to Shimer's puzzle.
Journal Article
The cyclicality of hires, separations, and job-to-job transitions
This paper measures the job-finding, separation, and job-to-job transition rates in the United States from 1948 to 2004. The job-finding and job-to-job transition rates are strongly procyclical and the separation rate is nearly acyclical, especially since 1985. The author develops a simple model in which unemployed workers search for jobs and employed workers search for better jobs. The model predicts that an increase in either the job-finding rate or the separation rate raises the job-to-job transition rate, which is qualitatively and quantitatively consistent with the available evidence. In ...