Heterogeneity and Cyclical Unemployment
37 Pages Posted: 21 Jul 2009 Last revised: 11 Dec 2022
Date Written: July 2009
Abstract
We model worker heterogeneity in the rents from being employed in a Diamond-Mortensen-Pissarides model of matching and unemployment. We show that heterogeneity, reflecting differences in match quality and worker assets, reduces the extent of fluctuations in separations and unemployment. We find that the model faces a trade-off--it cannot produce both realistic dispersion in wage growth across workers and realistic cyclical fluctuations in unemployment.
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
Incentives in Competitive Search Equilibrium
By Espen R. Moen and Asa Rosen
-
The Cyclical Behavior of Equilibrium Unemployment and Vacancies Revisited
By Marcus Hagedorn and Iourii Manovskii
-
The Cyclical Behavior of Equilibrium Unemployment and Vacancies: Evidence and Theory
-
Incentives in Competitive Search Equilibrium and Wage Rigidity
By Espen R. Moen and Asa Rosen
-
Incentives in Competitive Search Equilibrium and Wage Rigidity
By Espen R. Moen and Asa Rosen
-
Search-Theoretic Models of the Labor Market: A Survey
By Richard Rogerson and Randall Wright
-
Search-Theoretic Models of the Labor Market-A Survey
By Richard Rogerson, Robert Shimer, ...
-
Unemployment Fluctuations with Staggered Nash Wage Bargaining
By Mark Gertler and Antonella Trigari
-
Employer-to-Employer Flows in the U.S. Labor Market: The Complete Picture of Gross Worker Flows