scholarly journals The Weak Job Recovery in a Macro Model of Search and Recruiting Intensity

2020 ◽  
Vol 12 (1) ◽  
pp. 310-343
Author(s):  
Sylvain Leduc ◽  
Zheng Liu
Keyword(s):  
Great Recession ◽  
Discount Factor ◽  
Search Model ◽  
Free Entry ◽  
Filling Rate ◽  
Aggregate Shocks ◽  
Macro Model ◽  
The Great Recession ◽  
Cyclical Fluctuations ◽  
Labor Search

We show that cyclical fluctuations in search and recruiting intensity are quantitatively important for explaining the weak job recovery from the Great Recession. We demonstrate this result using an estimated labor search model that features endogenous search and recruiting intensity. Since the textbook model with free entry implies constant recruiting intensity, we introduce a cost of vacancy creation, so that firms respond to aggregate shocks by adjusting both vacancies and recruiting intensity. Fluctuations in search and recruiting intensity driven by shocks to productivity and the discount factor help bridge the gap between the actual and model-predicted job-filling rate. (JEL E24, E32, J41, J63, J64)

scholarly journals Recruiting Intensity during and after the Great Recession: National and Industry Evidence

2012 ◽  
Vol 102 (3) ◽  
pp. 584-588 ◽  
Author(s):  
Steven J Davis ◽  
R. Jason Faberman ◽  
John C Haltiwanger
Keyword(s):  
Great Recession ◽  
Search Theory ◽  
Generalized Function ◽  
Labor Turnover ◽  
Matching Function ◽  
Filling Rate ◽  
The Great Recession ◽  
Job Openings ◽  
Labor Search ◽  
Using Data

We measure job-filling rates and recruiting intensity per vacancy at the national and industry levels from January 2001 to September 2011 using data from the Job Openings and Labor Turnover Survey. Industry-level movements in these variables are at odds with implications of the standard matching function in labor search theory but consistent with a generalized function that incorporates an important role for recruiting intensity. Construction makes up less than five percent of employment but accounts for more than 40 percent of the large swings in the job-filling rate during and after the Great Recession.

Aggregate Recruiting Intensity

2018 ◽  
Vol 108 (8) ◽  
pp. 2088-2127 ◽  
Author(s):  
Alessandro Gavazza ◽  
Simon Mongey ◽  
Giovanni L. Violante
Keyword(s):  
Labor Market ◽  
Great Recession ◽  
Equilibrium Model ◽  
Random Search ◽  
Firm Dynamics ◽  
Hiring Decisions ◽  
Aggregate Shocks ◽  
Fast Growing ◽  
The Great Recession ◽  
Matching Efficiency

We develop an equilibrium model of firm dynamics with random search in the labor market where hiring firms exert recruiting effort by spending resources to fill vacancies faster. Consistent with microevidence, fast-growing firms invest more in recruiting activities and achieve higher job-filling rates. These hiring decisions of firms aggregate into an index of economy-wide recruiting intensity. We study how aggregate shocks transmit to recruiting intensity, and whether this channel can account for the dynamics of aggregate matching efficiency during the Great Recession. Productivity and financial shocks lead to sizable procyclical fluctuations in matching efficiency through recruiting effort. Quantitatively, the main mechanism is that firms attain their employment targets by adjusting their recruiting effort in response to movements in labor market slackness. (JEL D22, E24, E32, J23, J41, J63, M51)

UNSECURED CREDIT, PRODUCT VARIETY, AND UNEMPLOYMENT DYNAMICS

2020 ◽  
pp. 1-37
Author(s):  
Mario Rafael Silva
Keyword(s):  
Great Recession ◽  
Product Variety ◽  
Free Entry ◽  
Financial Shocks ◽  
Productivity Shocks ◽  
The Great Recession ◽  
Borrowing Constraint ◽  
Short Run ◽  
Prime Determinant ◽  
Revolving Credit

Revolving credit is the prime determinant of short-run household liquidity and comoves positively with product variety and negatively with unemployment. I develop a theory of feedback between revolving credit and product development and examine its ability to explain labor market volatility. Extending the Mortensen–Pissarides model with an endogenous borrowing constraint and free entry of monopolistically competitive firms reproduces stylized facts in the data and amplifies both productivity and financial shocks through mutual causality. Higher debt limits encourage firm entry and raise product variety (the entry channel), and greater variety makes default more costly and thereby raises the equilibrium debt level (the consumption value channel). Though productivity shocks are sufficient to generate higher volatility, financial shocks are essential in approximating the time series patterns of unemployment, vacancies, and revolving credit in the data, and reproduce the rise in unemployment during the Great Recession.

Labour market fluctuations in GIPS – shocks vs adjustments

2017 ◽  
Vol 38 (7) ◽  
pp. 913-939 ◽  
Author(s):  
Marek Antosiewicz ◽  
Piotr Lewandowski
Keyword(s):  
Labour Market ◽  
Open Economy ◽  
Great Recession ◽  
German Economy ◽  
Impulse Response Functions ◽  
Content Type ◽  
The Great Recession ◽  
Cyclical Fluctuations ◽  
German Model ◽  
Lower Variability

Purpose The purpose of this paper is to identify factors behind cyclical fluctuations and differences in adjustments to shocks in Greece, Italy, Portugal and Spain (GIPS) and a reference country – Germany. The authors try to answer the question whether the GIPS countries could have fared differently in the Great Recession if they reacted to shocks affecting them like a resilient German economy would have. Design/methodology/approach The authors use a DSGE model of real open economy with search and matching on the labour market and endogenous job destruction, estimated separately for each country. The authors calculate impulse response functions, historical decompositions and perform counterfactual simulations of the response of the German model to the sequence of shocks identified for each of GIPS. Findings The authors find that all GIPS countries were more vulnerable to productivity and foreign demand shocks than Germany. They would have experienced lower macroeconomic volatility if they reacted to their shocks like Germany. Employment (unemployment) rates in GIPS would have been less volatile and higher (lower) during the Great Recession, especially in Spain and Greece. Real wage volatility would have been higher, especially in Spain and Portugal. Originality/value The trade-off between unemployment and wage adjustments vis-à-vis Germany was the largest in Spain, which also would have experienced lower variability of job separations and hirings. The evolution of the labour market in Greece and Portugal was driven rather by its higher responsiveness to GDP fluctuations than in Germany, whereas Italy emerges as the least responsive labour market within GIPS.

Women and men's employment and unemployment in the great recession

2010 ◽  
Author(s):  
Heidi Hartmann ◽  
Ashley English ◽  
Jeffrey Hayes
Keyword(s):  
Great Recession ◽  
The Great Recession
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