We propose a three-step factor-flows simulation-based approach to forecast the duration distribution of unemployment … history. Step 2: relate the aggregate components to the overall unemployment rate using a factor model. Step 3: combine the … individual duration dependence, factor structure, and an auxiliary forecast of the unemployment rate to simulate a panel of …

Unemployment inflows fell from 4 percent of employment per month in the early 1980s to 2 percent or less by the mid … parameter in search and matching models of unemployment. According to these models, a lower intensity of idiosyncratic shocks … produces less job destruction, fewer workers flowing through the unemployment pool and less frictional unemployment. To …

The flow opportunity cost of moving from unemployment to employment consists of foregone public benefits and the … is procyclical and volatile over the business cycle. The estimated cyclicality implies far less unemployment volatility …