The Cyclicality of Separation and Job Finding Rates

23 Pages Posted: 19 Sep 2007

See all articles by Shigeru Fujita

Shigeru Fujita

Federal Reserve Bank of Philadelphia

Garey Ramey

University of California, San Diego (UCSD) - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: August 2007

Abstract

This paper uses CPS gross flow data, adjusted for margin error and time aggregation error, to analyze the business cycle dynamics of separation and job finding rates and to quantify their contributions to overall unemployment variability. Cyclical changes in the separation rate lead those of unemployment, while the job finding rate and unemployment move contemporaneously. Fluctuations in the separation rate explain between 40 and 50 percent of fluctuations in unemployment, depending on how the data are detrended. The authors results suggest an important role for the separation rate in explaining the cyclical behavior of unemployment.

Keywords: Separation rate, Job finding rate, Unemployment, CPS worker flows

JEL Classification: J63, J64

Suggested Citation

Fujita, Shigeru and Ramey, Garey, The Cyclicality of Separation and Job Finding Rates (August 2007). FRB of Philadelphia Working Paper No. 07-19, Available at SSRN: https://ssrn.com/abstract=1015276 or http://dx.doi.org/10.2139/ssrn.1015276

Shigeru Fujita (Contact Author)

Federal Reserve Bank of Philadelphia ( email )

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Philadelphia, PA 19106-1574
United States

Garey Ramey

University of California, San Diego (UCSD) - Department of Economics ( email )

9500 Gilman Drive
La Jolla, CA 92093-0508
United States
858-534-5721 (Phone)
858-534-7040 (Fax)

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