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Search frictions and evolving labour market dynamics
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Ellington, Michael, Martin, Chris and Wang, Bingsong (2019) Search frictions and evolving labour market dynamics. Working Paper. Coventry: University of Warwick. Department of Economics. Warwick economics research papers series (WERPS) (1195). (Unpublished)
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Official URL: https://warwick.ac.uk/fac/soc/economics/research/w...
Abstract
This paper puts search frictions models under novel empirical scrutiny and tests their ability to match empirical observations. To capture changing dynamics we fit an extended Bayesian time-varying parameter VAR to US labour market data from 1962–2016. Our results indicate that these models are unable to match the responses of key variables to identified structural shocks. We document substantial changes in the transmission, and economic importance, of shocks throughout time that this framework is unable to explain. In particular, although search frictions models use productivity and job separations shocks to explain the labour market, these shocks only explain at best 50% of fluctuations in key labour market variables.
Item Type: | Working or Discussion Paper (Working Paper) | ||||
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Subjects: | H Social Sciences > HD Industries. Land use. Labor | ||||
Divisions: | Faculty of Social Sciences > Economics | ||||
Library of Congress Subject Headings (LCSH): | Labor market -- United States, Macroeconomics -- Mathematical models | ||||
Series Name: | Warwick economics research papers series (WERPS) | ||||
Publisher: | University of Warwick. Department of Economics | ||||
Place of Publication: | Coventry | ||||
ISSN: | 0083-7350 | ||||
Official Date: | May 2019 | ||||
Dates: |
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Number: | 1195 | ||||
Number of Pages: | 22 | ||||
Institution: | University of Warwick | ||||
Status: | Not Peer Reviewed | ||||
Publication Status: | Unpublished | ||||
Access rights to Published version: | Open Access (Creative Commons) | ||||
Date of first compliant deposit: | 14 May 2019 | ||||
Date of first compliant Open Access: | 15 May 2019 |
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