Gross worker flows over the business cycle

Per Krusell, Toshihiko Mukoyama, Richard Rogerson, Ayşegül Şahin

Research output: Contribution to journalReview articlepeer-review

41 Scopus citations

Abstract

We build a hybrid model of the aggregate labor market that features both standard labor supply forces and frictions in order to study the cyclical properties of gross worker flows across the three labor market states: employment, unemployment, and nonparticipation. Our parsimonious model is able to capture the key features of the cyclical movements in gross worker flows. Despite the fact that the wage per efficiency unit is constant over time, intertemporal substitution plays an important role in shaping fluctuations in the participation rate.

Original languageEnglish (US)
Pages (from-to)3447-3476
Number of pages30
JournalAmerican Economic Review
Volume107
Issue number11
DOIs
StatePublished - Nov 2017

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

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