In the standard macroeconomic search and matching model of the labor market, there is a tight link between the quantitative effects of (i) aggregate productivity shocks on unemployment and (ii) unemployment benefits on unemployment. This tight link is at odds with the empirical literature. We...

In the standard macroeconomic search and matching model of the labor market, there is a tight link between the quantitative effects of (i) aggregate productivity shocks on unemployment and (ii) unemployment benefits on unemployment. This tight link is at odds with the empirical literature. We...

This chapter assesses how models with search frictions have shaped our understanding of aggregate labor market outcomes in two contexts: business cycle fluctuations and long-run (trend) changes. We first consolidate data on aggregate labor market outcomes for a large set of OECD countries. We...

The high U.S. unemployment rate after the Great Recession is usually considered to be a result of changes in factors influencing either the demand side or the supply side of the labor market. However, no matter what factors have caused the changes in the unemployment rate, these factors should...

The average employment rate for the OECD countries was close to 63 percent in the period 2000- 2015 but there is considerable variation within and between countries. We find that a dynamic model for employment, derived from a multiple equation macro model with institutional and population...

The average employment rate for the OECD countries was close to 63 percent in the period 2000-2015 but there is considerable variation within and between countries. We find that a dynamic model for employment, derived from a multiple equation macro model with institutional and population...

Equilibrium search theory suggests that the wage distribution in a cross section of workers is closely related to labor market transitions and associated wage changes. Accordingly, job-to-job transitions are central in explaining the wage distribution. This paper uses the IAB employment...

To explain the high and persistent unemployment rate in the U.S. during and after the Great Recession, this effort develops and estimates a DSGE model with search and matching frictions and shocks to unemployment benefits and matching efficiency. It finds that the unemployment benefits play an...

This paper uses data for the UK and the Netherlands (1983q4-2011q4) to test if hysteresis occurs in these economics, and through what mechanisms. The novelty of the paper resides in the use of a VAR-IRF that encompasses previous hysteresis studies and the use of specific Labour Market...

Since the so-called Hartz IV reforms around 2005 and during the global crisis of 2008/2009, the German labor market featured mainly declining unemployment rates. We develop a search and matching model with heterogeneous skills to explore the role of structural and cyclical policies for this...