U.S. Labor Market Dynamics Revisited

By Eran Yashiv. Social Science Research Network, 2007

201 citations recorded by the source corpus.

The picture of U.S. labor market dynamics is opaque. Empirical studies of U.S. gross worker flows have yielded contradictory findings, and it is not easy to get a sense of the key moments of the data. Debates have emerged regarding the implications of these flows for the understanding of the business cycle. The early view was that worker separations from jobs are the more dominant cyclical phenomenon (relative to the hirings of workers), and that therefore it is important to analyze the causes for separations or job destruction. Later, this view was challenged by the claim that separations are roughly constant over the cycle, and that the key to the understanding of the business cycle is in the cyclical behavior of the job finding rate. This paper aims at clarifying the picture, trying to determine what facts can be established, what are their implications for the business cycle, and what remains to be further investigated. The main findings are: (i) There is considerable cyclicality and volatility of both accessions and separations. Hence, both are important for the understanding the business cycle. The paper delineates the key business cycle facts of the labor market. (ii) The major remaining problems, in need of further study, are the disparities in the measurement of flows between employment and the pool of workers out of the labor force, disagreements on the relative volatility of job finding and separation rates across data sets, and the fact that the fit of the gross flows data with net employment growth data differs across studies and is not high.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/1a04e0a6da8e2752ef10729cea2010d3e39eb7d8

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Citations in the corpus

Labor markets and productivity in developing countries (2008, background): “6Pissarides (2000), Rogerson et al. (2005) and Yashiv (2007) provide recent surveys of search and matching models applied to developed country labor markets.”
The Effect of Consumption and Production Structure on Growth and Distribution: A Micro to Macro Model (2010, methodology): “We assume that the labour market can be represented by a matching model (Petrongolo and Pissarides, 2001; Yashiv, 2007), and we use a hyperbolic form of the matching function:11 Um C Vt H t= + −β 1 (34) where CH is the constant and b defines the relation between vacancies Vt-1 and unemployment…”
Effects of a reduction of working hours on a model with job creation and job destruction (2007, background): “2 Yashiv (2007) develops a model which produces a better adjustment of data and a more realistic behaviour of macroeconomic variables.”
Inflation Dynamics with Search Frictions: A Structural Econometric Analysis (2008, unknown): “The (quarterly) steady-state rate of exogenous and endogenous separation ρ = 0.05, a value consistent with evidence by Yashiv (2006), slightly higher than 0.034 of Den Haan et al. (2000), but lower than 0.086, the value used by Merz and Yashiv (2007).”
Employment, Wages, and the Economic Cycle: Differences between Immigrants and Natives (2009, unknown): “7 For an excellent overview of the debate in this literature on this assumption, see Yashiv (2007).”
Decomposing the Ins and Outs of Cyclical Unemployment (2012, unknown): “This has been established by, among others, Blanchard and Diamond (1990), Yashiv (2008) and Fujita and Ramey (2009).”
Accounting for endogeneity in matching function estimation (2013, background): “5 See the surveys by Petrongolo and Pissarides (2001) and Yashiv (2007).”
The Ins and Outs of Cyclical Unemployment (2007, unknown): “…that can yield a more stable corrected series for short- term unemployment over the post-redesign era is to multiply the official short-term unemployment series by the era’s average of the ratio of the short-term share for the first and fifth rotation groups to the full sample’s short-term share.”
When more Flexibility Yields more Fragility: the Microfoundations of Keynesian Aggregate Unemployment (2017, background): “The former are typically used in aggregated models and the latter more in tune with models attempting to find some sort of equilibrium micro-foundation such as search-and-matching ones (see Yashiv, 2007).”
The Beveridge Curve: A Survey (2015, unknown): “Although these concerns should be borne in mind, available data have revealed such substantial shifts in the Beveridge curve that there is typically thought to be some signal amid the noise. Jackman, Pissarides, and Savouri (1990), for example, plot Beveridge curves for sixteen OECD economies, with ”
Opening the Black Box of the Matching Function: The Power of Words (2020, background): “This approach has been fruitful for improving our understanding of macro issues (Yashiv, 2007).”