Martin, Chris and Wang, Bingsong (2020) Search, shirking and labor market volatility. Journal of Macroeconomics, 66 . 103243. doi:10.1016/j.jmacro.2020.103243

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Abstract

This paper proposes a modified version of the standard search and matching model of the labour market that includes a shirking mechanism. We show that our model delivers a close match to the simulated volatilities, correlations and autocorrelations of unemployment, vacancies, labour market tightness and the job finding rate with values observed in US data. In doing so, it outperforms prominent alternative models. Our model also has novel policy implications for the impact of income taxes, subsidies on hiring and employment taxes on unemployment and its volatility.

Item Type:	Journal Article
Subjects:	H Social Sciences > HB Economic Theory
Divisions:	Faculty of Social Sciences > Economics
Library of Congress Subject Headings (LCSH):	Labor market -- Econometric models, Unemployment -- Econometric models, Business cycles -- Econometric models, Labor supply
Journal or Publication Title:	Journal of Macroeconomics
Publisher:	Elsevier BV * North-Holland
ISSN:	0164-0704
Official Date:	December 2020
Dates:	Date Event December 2020 Published 29 August 2020 Available 23 August 2020 Accepted
Volume:	66
Article Number:	103243
DOI:	10.1016/j.jmacro.2020.103243
Status:	Peer Reviewed
Publication Status:	Published
Access rights to Published version:	Restricted or Subscription Access
Related URLs:	Publisher

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