Menzio, Guido; Moen, Espen R - C.E.P.R. Discussion Papers - 2008
of unemployment and vacancies to negative shocks to the aggregate productivity of labor. …We consider a frictional labor market in which firms want to insure their senior employees against income fluctuations … of senior workers does not affect the allocation of labor, the rigidity of the wage of new hires magnifies the response …