scholarly journals Do Job-to-Job Transitions Drive Wage Fluctuations Over the Business Cycle?

2017 ◽  
Vol 107 (5) ◽  
pp. 353-357 ◽  
Author(s):  
Fatih Karahan ◽  
Ryan Michaels ◽  
Benjamin Pugsley ◽  
Ayşegül Şahin ◽  
Rachel Schuh
Keyword(s):  
Business Cycle ◽  
Transition Probability ◽  
Explanatory Power ◽  
Wage Growth ◽  
Wage Dynamics ◽  
Job Transitions ◽  
State Variation ◽  
The Business Cycle ◽  
Job Finding ◽  
The Unemployed

We investigate the importance of job-to-job (JJ) transitions for cyclical wage dynamics. By exploiting cross-state variation, we find that wage growth is tightly linked to variation in the JJ transition probability, and conditional on this, the job finding probability of the unemployed has no explanatory power. We investigate the robustness of our results to several caveats and find the result to hold. Finally, we discuss the implications of our findings for competing theories of wage dynamics.

Notes from the Editors, February 2020

2020 ◽  
pp. c2-64
Author(s):  
The Editors
Keyword(s):  
Business Cycle ◽  
Unemployment Rate ◽  
Full Employment ◽  
Wage Growth ◽  
The Past ◽  
Labor Statistics ◽  
The Business Cycle ◽  
Bureau Of Labor Statistics ◽  
The U.S ◽  
New Jobs

buy this issue According to the U.S. Bureau of Labor Statistics, the U.S. economy is experiencing an unemployment rate that is at a fifty-year low. Yet, wage growth continues to be weak, with continuing wage stagnation even at the peak of the business cycle. A major and largely undertheorized reason for the sluggish wages in a period of seeming full employment is to be found in the fact that the new jobs being created by the economy do not measure up to those of the past in terms of weekly wages and hours, or in the degree to which they support households or even individuals.

The role of non-formal lifelong learning at different points in the business cycle

2018 ◽  
Vol 39 (2) ◽  
pp. 334-352 ◽  
Author(s):  
Helena Corrales-Herrero ◽  
Beatriz Rodríguez-Prado
Keyword(s):  
Business Cycle ◽  
Lifelong Learning ◽  
Labour Market Situation ◽  
Content Type ◽  
The Great Recession ◽  
Market Situation ◽  
The Business Cycle ◽  
The Individual ◽  
The Unemployed ◽  
The Impact

Purpose Despite the widely recognised importance of lifelong learning, there are mixed results on its causal economic impact. The purpose of this paper is to investigate how economic conditions change the composition of participants in non-formal lifelong learning and whether the business cycle is relevant for the impact of non-formal lifelong learning on employability. Design/methodology/approach Non-linear decomposition techniques and matching estimators based on multidimensional covariates are applied to the Spanish sample of the European Adult Education Survey. The analysis controls for background, human capital and personal traits and draws a distinction between unemployed and employed workers. Findings The results show major differences in the volume and composition of participants before and during the Great Recession. In addition, there is a business cycle dependence of the effectiveness of non-formal lifelong learning that varies with the individual labour market situation. While lifelong learning proves more effective for the unemployed in recessions, for the employed the impact is greater in expansions. Originality/value The paper provides new evidence on the scant results of the moderating effect of the business cycle on the impact of lifelong learning. The analysis is not restricted to training implemented within public programmes, but rather extends to any kind of non-formal lifelong learning undertaken by unemployed and employed workers. In this sense, the analysis provides information about the optimal moment to invest in lifelong learning from both the policymaker and individual as well as firm perspective.

ICAPM and the Accruals Anomaly

2020 ◽  
Vol 10 (03) ◽  
pp. 2050014 ◽  
Author(s):  
Hui Guo ◽  
Paulo Maio
Keyword(s):  
Business Cycle ◽  
Explanatory Power ◽  
Risk Premia ◽  
Key Factors ◽  
Baseline Model ◽  
Cross Sectional ◽  
Multifactor Models ◽  
Accruals Anomaly ◽  
The Business Cycle

We propose new multifactor models to explain the accruals anomaly. Our baseline model represents an application of Merton’s ICAPM in which the key factors represent (innovations on) the term and small-value spreads. The model shows large explanatory power for cross-sectional risking premia associated with three accruals portfolio groups. A scaled version of the model shows better performance, suggesting that accruals risk premia are related with the business cycle. Both models compare favorably with popular multifactor models used in the literature, and also perform well in pricing other important anomalies. The risk price estimates of the hedging factors are consistent with the ICAPM framework.

Vacancy chains and the business cycle. Stringing together job-to-job transitions in micro data

2014 ◽  
Vol 35 (8) ◽  
pp. 1212-1235 ◽  
Author(s):  
Carlo Gianelle ◽  
Giuseppe Tattara
Keyword(s):  
Women Workers ◽  
Business Cycle ◽  
Labour Market ◽  
Bargaining Power ◽  
Chain Model ◽  
Micro Data ◽  
Content Type ◽  
Job Transitions ◽  
The Business Cycle ◽  
Vacancy Chains

Purpose – The purpose of this paper is to examine the dynamics of labour market flows over the business cycle through a vacancy chain model. It provides a direct computation of vacancy chains using micro data, empirically investigates the relationship between chain length and the characteristics of jobs and workers initiating the chain, and finally assesses the wage progression of workers moving along the chain. Design/methodology/approach – The paper draws on a longitudinal matched employer-employee database covering all employees in manufacturing in a large region of Italy. A transparent algorithm for vacancy chain computation is developed and standard econometric techniques are employed to analyze job-to-job transitions within identified chains. Findings – Vacancy chains account on average for more than one-third of total hires, and both the number and the length of chains are clearly pro-cyclical. Chains set in motion by women workers, young, old, blue collars, or employed by small firms tend to be shorter. There is a well-defined wage progression from the tail to the head of the chain, revealing that workers are sorted along chains according to skill and/or bargaining power. Research limitations/implications – There is a limited possibility of identifying separately individual ability and bargaining power. Practical implications – The vacancy chain methodology can increase the ability of policy makers to produce detailed maps of the labour market and identify worker profiles associated with poor outcomes and hence deserving special attention. Originality/value – For the first time, this paper operationalizes the vacancy chain approach on a large scale, at a very high level of detail, and over a long-time span.

Mismatch

2007 ◽  
Vol 97 (4) ◽  
pp. 1074-1101 ◽  
Author(s):  
Robert Shimer
Keyword(s):  
Business Cycle ◽  
Labor Markets ◽  
Dynamic Model ◽  
Duration Dependence ◽  
Cycle Frequency ◽  
Separation Rate ◽  
The Business Cycle ◽  
Job Finding

This paper develops a dynamic model of mismatch. Workers and jobs are randomly allocated to labor markets. Each market clears, but some have excess (unemployed) workers and some have excess (vacant) jobs. As workers and jobs switch markets, unemployed workers find vacancies and employed workers become unemployed. The model is quantitatively consistent with the business cycle frequency comovement of unemployment, vacancies, and the job finding rate and explains much of these variables' volatility. It can also address cyclicality in the separation rate into unemployment and duration dependence in the job finding rate. The results are robust to some nonrandom mobility. (JEL E24, J41, J63, J64)

Notes from the Editors, March 2020

2020 ◽  
pp. c2-64
Author(s):  
The Editors
Keyword(s):  
Business Cycle ◽  
Unemployment Rate ◽  
Full Employment ◽  
Wage Growth ◽  
The Past ◽  
Labor Statistics ◽  
The Business Cycle ◽  
Bureau Of Labor Statistics ◽  
The U.S ◽  
New Jobs

buy this issue According to the U.S. Bureau of Labor Statistics, the U.S. economy is experiencing an unemployment rate that is at a fifty-year low. Yet, wage growth continues to be weak, with continuing wage stagnation even at the peak of the business cycle. A major and largely undertheorized reason for the sluggish wages in a period of seeming full employment is to be found in the fact that the new jobs being created by the economy do not measure up to those of the past in terms of weekly wages and hours, or in the degree to which they support households or even individuals.

scholarly journals PERSONAL-BANKRUPTCY CYCLES

2013 ◽  
Vol 18 (7) ◽  
pp. 1488-1507 ◽  
Author(s):  
Thomas A. Garrett ◽  
Howard J. Wall
Keyword(s):  
Business Cycle ◽  
Upward Trend ◽  
Personal Bankruptcy ◽  
State Variation ◽  
The Business Cycle ◽  
Bankruptcy Rate ◽  
Bounce Back

This paper estimates the dynamics of the personal-bankruptcy rate over the business cycle by exploiting large cross-state variation. We find that bankruptcy rates are significantly above trend during a recession and rise as a recession persists. After a recession ends, there is a hangover in which bankruptcy rates begin to fall but remain above trend for several more quarters. Recovery periods see a strong bounce-back effect, with bankruptcy rates significantly below trend for several quarters. Despite the significant increases in bankruptcies during recessions, the largest contributor to rising bankruptcies during these periods has tended to be the longstanding upward trend.

scholarly journals Job Selection and Wages over the Business Cycle

2013 ◽  
Vol 103 (2) ◽  
pp. 771-803 ◽  
Author(s):  
Marcus Hagedorn ◽  
Iourii Manovskii
Keyword(s):  
Labor Market ◽  
Business Cycle ◽  
Job Search ◽  
Predictive Power ◽  
Explanatory Power ◽  
Market Conditions ◽  
History Dependence ◽  
Labor Market Conditions ◽  
Job Selection ◽  
The Business Cycle

We consider a model with on-the-job search where current wages depend only on current aggregate labor market conditions and idiosyncratic match-specific productivities. We show theoretically that the model replicates the findings in Bils (1985) and Beaudry and DiNardo (1991) on the history dependence in wages. We develop a method to measure match qualities in the data and show empirically that various variables summarizing past aggregate labor market conditions have explanatory power for current wages only because they are correlated with match qualities. They lose any predictive power once match qualities are accounted for. (JEL E3, E24, J3)

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