unemployed and out of the labor force. Why so? The paper provides an explanation by studying the optimal recruiting behavior of … the representative firm. This behavior is a function of the value of jobs, i.e., the expected present value of the …-intuitive, is shown to be consistent with well-known business cycle facts, such as pro-cyclical employment and pro-cyclical vacancy …

optimal level of unemployment benefits, the funding of unemployment insurance and the impact of employment protection … models have deeply renewed the understanding of job search, job flows, job creations and destructions, unemployment and wage …

jumps. Employment is unchanged in response to small demand shocks, but moves instantaneously to a new long-run equilibrium … listing of job vacancies, all of which change the cost of adjusting employment …