Gross Worker Flows over the Business Cycle
Per Krusell, Toshihiko Mukoyama, Richard Rogerson, Ayşegül Şahin
American Economic Review · 2017 · Volume 107 · Issue 11
Abstract
We build a hybrid model of the aggregate labor market that features both standard labor supply forces and frictions in order to study the cyclical properties of gross worker flows across the three labor market states: employment, unemployment, and nonparticipation. Our parsimonious model is able to capture the key features of the cyclical movements in gross worker flows. Despite the fact that the wage per efficiency unit is constant over time, intertemporal substitution plays an important role in shaping fluctuations in the participation rate.
Keywords
Employment, Unemployment, Wages, Intergenerational Income Distribution, Aggregate Human Capital, Aggregate Labor Productivity, Business Fluctuations, Cycles, Time Allocation and Labor Supply, Wage Level and Structure, Wage Differentials, Unemployment: Models, Duration, Incidence, and Job Search, Unemployment Insurance, Severance Pay, Plant Closings
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