American Economic Review Vol. 107 No. 11 2017

Gross Worker Flows over the Business Cycle

Per Krusell¹; Toshihiko Mukoyama²; Richard Rogerson³; Ayşegül Şahin⁴

¹ University of Göteborg, Institute for International Economic Studies, Stockholm University, S-106 91 Stockholm, Sweden, CEPR, and NBER (email: ) · ² Department of Economics, Georgetown University, 37th and O Streets NW, Washington, DC 20057, and University of Virginia (email: ) · ³ Woodrow Wilson School, Princeton University, Princeton, NJ 08544 and NBER (email: ) · ⁴ Federal Reserve Bank of New York, 33 Liberty Street, New York, NY 10045 (email: )

Abstract

We build a hybrid model of the aggregate labor market that features both standard labor supply forces and frictions in order to study the cyclical properties of gross worker flows across the three labor market states: employment, unemployment, and nonparticipation. Our parsimonious model is able to capture the key features of the cyclical movements in gross worker flows. Despite the fact that the wage per efficiency unit is constant over time, intertemporal substitution plays an important role in shaping fluctuations in the participation rate.

DOI

10.1257/aer.20121662

Volume

107

Issue

11

Pages

3447-3476

Language

en

Sources

bibtex:phds-export.bib openalex crossref

Cite

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