On-the-Job Search and the Cyclical Dynamics of the Labor Market

By Michael U. Krause, Thomas A. Lubik. Social Science Research Network, 2007

146 citations recorded by the source corpus.

We show how on-the-job search and the propagation of shocks to the economy are intricately linked. Rising search by employed workers in a boom amplifies the incentives of firms to post vacancies. In turn, more vacancies induce more on-the-job search. By keeping job creation costs low for firms, on-the-job search greatly amplifies shocks. In our baseline calibration, this allows the model to generate fluctuations of unemployment, vacancies, and labor productivity whose magnitudes are close to the data, and leads output to be highly autocorrelated.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/019e381bf688d434763d4a4270c57a1c63186ee9

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Economics and Econometrics

1. M. Gertler
2. A. Trigari
3. Pedro Gomes
4. Harald Uhlig
5. Michael U. Krause
6. V. Ramey
7. Lutz Kilian
8. Pascal Paul

Citations in the corpus

• Some Fiscal Calculus (2010, background): “e, gt ≡ ḡ + χ0ǫg,0 for all t (10) Second, I consider an announced permanent increase known at date 0, gt ≡ ḡ + χ4ǫg,0 for all t ≥ t0 = 4, else:gt ≡ ḡ (11) Finally, I seek a simple characterization of anticipated dynamics shown in figure 6.”
• Efficient Search on the Job and the Business Cycle (2011, unknown): “Krause and Lubik (2007) reach similar conclusions using a model of segmented search on the job with two different types of vacancies.”
• Transitions in the German Labor Market: Structure and Crisis (2011, background): “27 See Krebs and Scheffel (2011) for related findings concerning how the different worker types fare.”
• Nominal Wage Rigidities in a New Keynesian Model with Frictional Unemployment (2006, unknown): “2 The integration of wage rigidities and nominal price stickiness in the labor-search models has been analyzed by Krause and Lubik (2005), Christoffel and Linzert (2004), Blanchard and Gali (2005) and Christoffel, Kuster, and Linzert (2006).”
• Labour Market Flows: Facts from the United Kingdom (2012, background): “For instance, Krause and Lubik (2007), building on the Pissarides (1994) on-the-job search model, concluded that on-the-job search and job-to-job transitions greatly amplify shocks to the economy.”
• Unemployment Fluctuations with Staggered Nash Wage Bargaining (2006, background): “λ ρ+ x (w, s) ρ+ x̄ dG (w, s) + (1− λ) if w = w∗0 (30)”