This paper presents a theory explaining the labor market matching process through microeconomic incentives. There are …

The persistence of U.S. unemployment has risen with each of the last three recessions, raising the specter that future … shocks do not systematically lead to more persistent unemployment than monetary policy shocks, so these cannot explain the … rising persistence of unemployment. Second, monetary and fiscal policies can account for only part of the evolving …

, Germany, and the United Kingdom, we document striking similarities in spatial differences in unemployment, vacancies, job … finding, and job filling within each country. This robust set of facts guides and disciplines the development of a theory of … quantitatively rationalizes why differences in job-separation rates have primary importance in inducing differences in unemployment …

density function with higher density and thereby generate large, asymmetric job-finding rate and unemployment reactions. Our …

frictions and unemployment insurance, when the latter is only imperfectly related to search effort. A balanced social insurance … volatility and persistence of vacancies and unemployment. …

underlying theory is the search and matching model, with workers and firms engaging in costly search leading to random matching …. The Beveridge curve depicts the steady state of the model, whereby inflows into unemployment are equal to the outflows …

This paper presents a theory explaining the labor market matching process through microeconomic incentives. There are …