Encouraging Participation in a Labor Market with Search and Matching Frictions

2012 ◽  
Author(s):  
Alon Binyamini ◽  
Tali Larom
Keyword(s):  
Labor Market ◽  
Search And Matching ◽  
Matching Frictions ◽  
Search And Matching Frictions

IMMIGRATION AND UNEMPLOYMENT: A MACROECONOMIC APPROACH

2017 ◽  
Vol 23 (4) ◽  
pp. 1313-1339 ◽  
Author(s):  
Takehiro Kiguchi ◽  
Andrew Mountford
Keyword(s):  
Temporary Increase ◽  
Macroeconomic Model ◽  
Search And Matching ◽  
Matching Frictions ◽  
Search And Matching Frictions

This paper analyzes the effects of an unanticipated increase in immigration in a macroeconomic model with search and matching frictions. It shows how an immigration shock can lead to a temporary increase in unemployment under a variety of conditions and that this is qualitatively consistent with the responses from a VAR estimated on postwar US data.

scholarly journals THE INTENSIVE MARGIN PUZZLE AND LABOR MARKET ADJUSTMENT COSTS

2015 ◽  
Vol 20 (6) ◽  
pp. 1458-1476
Author(s):  
Dennis Wesselbaum
Keyword(s):  
Labor Market ◽  
Adjustment Costs ◽  
Employment Protection ◽  
Intensive Margin ◽  
Firing Costs ◽  
Extensive And Intensive Margins ◽  
Matching Frictions ◽  
Search And Matching Frictions ◽  
Protection Legislation ◽  
Business Cycle Model

This paper documents a puzzling fact, namely that there is a significant negative relation between employment protection legislation and the usage of the intensive margin of labor market adjustments. I make use of a real business cycle model and introduce search and matching frictions as well as adjustment costs along the extensive and the intensive labor market margins. I show that the model is able to replicate the observed patterns of cyclicality, volatility, and especially the behavior of extensive and intensive margins if we assume low firing costs and relatively high hours adjustment costs.

scholarly journals Do Matching Frictions Explain Unemployment? Not in Bad Times

2012 ◽  
Vol 102 (4) ◽  
pp. 1721-1750 ◽  
Author(s):  
Pascal Michaillat
Keyword(s):  
Labor Market ◽  
Economic Equilibrium ◽  
Wage Rigidity ◽  
Search And Matching ◽  
Matching Model ◽  
Cyclical Fluctuations ◽  
Matching Frictions ◽  
Search And Matching Model ◽  
Marginal Returns

This paper proposes a search-and-matching model of unemployment in which jobs are rationed: the labor market does not clear in the absence of matching frictions. This job shortage arises in an economic equilibrium from the combination of some wage rigidity and diminishing marginal returns to labor. In recessions, job rationing is acute, driving the rise in unemployment, whereas matching frictions contribute little to unemployment. Intuitively in recessions, jobs are lacking, the labor market is slack, and recruiting is easy and inexpensive, so matching frictions do not matter much. In a calibrated model, cyclical fluctuations in the composition of unemployment are large.

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