Endogenous separations, wage rigidities and employment volatility

Mikael Carlsson and Andreas Westermark

We show that in micro data, as well as in a search and matching model with endogenous separations and rigid wages, separations and hence employment volatility are non-neutral to wage rigidities of incumbent workers. In contrast to when all wages are flexible, the standard deviation of unemployment in a model with rigid wages for incumbent workers (only) matches the standard deviation in the data. Thus, the degree of wage rigidity for newly hired workers is not a sufficient statistic for determining the effect of wage rigidities on macroeconomic outcomes in this class of models.

MoreLess

Year of publication:	July 2016
Authors:	Carlsson, Mikael ; Westermark, Andreas
Publisher:	Stockholm : Sveriges Riksbank
Subject:	Search and matching \| Unemployment volatility puzzle \| Wage rigidities \| Job Destruction \| Lohnrigidität \| Wage rigidity \| Arbeitslosigkeit \| Unemployment \| Volatilität \| Volatility \| Matching \| Arbeitsmarkt \| Labour market \| Suchtheorie \| Search theory \| Arbeitsuche \| Job search \| Konjunkturelle Arbeitslosigkeit \| Cyclical unemployment

Extent:	1 Online-Ressource (circa 33 Seiten) Illustrationen
Series:	Sveriges Riksbank working paper series. - Stockholm : [Verlag nicht ermittelbar], ZDB-ID 2235780-4. - Vol. 326
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Arbeitspapier ; Working Paper ; Graue Literatur ; Non-commercial literature
Language:	English
Other identifiers:	hdl:10419/157969 [Handle]
Classification:	J63 - Turnover; Vacancies; Layoffs ; J64 - Unemployment: Models, Duration, Incidence, and Job Search ; E30 - Prices, Business Fluctuations, and Cycles. General
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://www.econbiz.de/10011518661