@article{368ad8ff0921477fa6ef41a18208d27b,
title = "Gross worker flows over the business cycle",
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.",
author = "Per Krusell and Toshihiko Mukoyama and Richard Rogerson and Ay{\c s}eg{\"u}l {\c S}ahin",
note = "Funding Information: * Krusell: University of G{\"o}teborg, Institute for International Economic Studies, Stockholm University, S-106 91 Stockholm, Sweden, CEPR, and NBER (email: Per.Krusell@iies.su.se); Mukoyama: Department of Economics, Georgetown University, 37th and O Streets NW, Washington, DC 20057, and University of Virginia (email: tm1309@georgetown.edu); Rogerson: Woodrow Wilson School, Princeton University, Princeton, NJ 08544 and NBER (email: rdr@princeton.edu); S¸ahin: Federal Reserve Bank of New York, 33 Liberty Street, New York, NY 10045 (email: aysegul.sahin@ny.frb.org). This paper was accepted to the AER under the guidance of Luigi Pistaferri, Coeditor. This paper was previously titled “Is Labor Supply Important for Business Cycles?” We thank three anonymous referees, Gadi Barlevy, Michael Elsby, and Marcelo Veracierto, in addition to seminar and conference participants at the Asian Meeting of the Econometric Society (2011), Atlanta Fed, Chicago Fed, Bank of Korea, Cleveland Fed, European University Institute, Federal Reserve Board, Georgetown, HEC Montreal, Hitotsubashi Macro Econometrics Conference, Minneapolis Fed, National University of Singapore, NBER Summer Institute (2011), NBER Conference on Macroeconomics Across Time and Space (2011), NBER Economic Fluctuations and Growth Meeting (2011), Norges Bank, Oslo University, San Francisco Fed, Search and Matching Network Conference (2011), SED (2011), St. Louis Fed, University of Pennsylvania, University of Tokyo, University of Washington, and Uppsala University for useful comments. We thank Sam Kapon, Rachel Schuh, and Joe Song for excellent research assistance. Krusell thanks the NSF and the ERC for financial support, Mukoyama thanks the Bankard Fund for Political Economy for financial support, and Rogerson thanks the NSF and the Korean Science Foundation (WCU-R33-10005) for financial support. The views expressed in this paper are solely the responsibility of the authors and should not be interpreted as reflecting views of the Federal Reserve Bank of New York, or any other person associated with the Federal Reserve System. The authors declare that they have no relevant or material financial interests that relate to the research described in this paper. Publisher Copyright: {\textcopyright} 2017, American Economic Association. All rights reserved.",
year = "2017",
month = nov,
doi = "10.1257/aer.20121662",
language = "English (US)",
volume = "107",
pages = "3447--3476",
journal = "American Economic Review",
issn = "0002-8282",
publisher = "American Economic Association",
number = "11",
}