Worker flows and job flows behave differently over the business cycle. The authors investigate the sources of the differences by studying quantitative properties of a multiple-worker version of the search/matching model that features endogenous job separation and intra-firm wage bargaining....

This paper explores the determinants of equilibrium unemployment within the search and matching framework. Using structural estimation and simulation we demonstrate the usefulness of this model in accounting for the recent experience, shared by many OECD economies, of high and persistent...

I propose a new search-and-matching model in which wage rigidity and volatile unemployment endogenously arise. The Diamond-Mortensen-Pissarides model is generalized by incorporating job-ladder and vacancy-chain effects arising from on-the-job search and replacement hiring into a long-lived jobs...

This paper evaluates the effects of policy interventions on sectoral labour markets and the aggregate economy in a business cycle model with search and matching frictions. We extend the canonical model by including capital-skill complementarity in production, labour markets with skilled and...

This paper examines whether search and matching frictions in labor markets can account for cross-country differences in business cycle properties. The particular interest is the joint effect of two institutional variables, employment protection and the replacement income of unemployed workers. I...

Worker flows and job flows behave differently over the business cycle. We investigate the sources of the differences by studying quantitative properties of a multiple-worker version of the search/matching model that features endogenous job separation and intra-firm wage bargaining. Our...

This paper studies the quantitative properties of a multiple-worker firm matching model with on-the-job search where heterogeneous firms operate decreasing-returns-to-scale production technology. The authors focus on the model's ability to replicate the business cycle features of job flows,...

Studies that incorporate endogenous labor force participation, and search and matching frictions in a real business cycle model nd that this three state model generates counterfactual results: labor force participation is very volatile, unemployment is acyclical and highly positively correlated...

Job search decisions of unemployed workers are forward-looking and respond to expected returns from the search process. When expected returns (or discount rates) are high, the discounted benefits from the search process are low. Thus unemployed workers search less intensively for jobs. We build...

I study a dynamic search-matching model with two-sided heterogeneity, a production complementarity that induces labor market sorting, and aggregate shocks. In response to a positive productivity shock, incentives to sort increase disproportionately. Firms respond by posting additional vacancies,...