In the US almost 3 per cent of employees are absent from their job for reasons other than vacation, but are still technically employed. We argue that firms may find optimal to use temporary replacement workers to fill these vacant positions. We set up a matching model with directed search and...

The recent financial crises, alongside a dramatic rise in unemployment on both sides of the Atlantic, suggest that financial shocks do translate into the labor markets. In this paper we first document that financial recessions amplify labor market volatility and Okun's elasticity over the...