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Marginal Jobs, Heterogeneous Firms, and Unemployment Flows

Author

Listed:
  • Michael W. L. Elsby
  • Ryan Michaels

Abstract

This paper introduces a notion of firm size into a search and matching model with endogenous job destruction. The outcome is a rich, yet analytically tractable framework that can be used to analyze a broad set of features of both the cross-section and aggregate dynamics of the labor market. The model provides a coherent account of the distributions of employer size and employment growth across establishments, the amplitude and propagation of cyclical fluctuations in worker flows, the negative comovement of unemployment and vacancies, and the dynamics of the distribution of employer size over the business cycle. (JEL E24, E32, J63, J64)

Suggested Citation

  • Michael W. L. Elsby & Ryan Michaels, 2013. "Marginal Jobs, Heterogeneous Firms, and Unemployment Flows," American Economic Journal: Macroeconomics, American Economic Association, vol. 5(1), pages 1-48, January.
    • Handle: RePEc:aea:aejmac:v:5:y:2013:i:1:p:1-48
    Note: DOI: 10.1257/mac.5.1.1
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    References listed on IDEAS

    as
    1. Algan, Yann & Allais, Olivier & Den Haan, Wouter J., 2008. "Solving heterogeneous-agent models with parameterized cross-sectional distributions," Journal of Economic Dynamics and Control, Elsevier, vol. 32(3), pages 875-908, March.
    2. Eberly, Janice C. & Van Mieghem, Jan A., 1997. "Multi-factor Dynamic Investment under Uncertainty," Journal of Economic Theory, Elsevier, vol. 75(2), pages 345-387, August.
    3. Dixit, Avinash, 1997. "Investment and Employment Dynamics in the Short Run and the Long Run," Oxford Economic Papers, Oxford University Press, vol. 49(1), pages 1-20, January.
    4. repec:hal:spmain:info:hdl:2441/41rhqgovpp8hnq9i7ndtl26ltm is not listed on IDEAS
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    More about this item

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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    1. Marginal Jobs, Heterogeneous Firms, and Unemployment Flows (AEJ:MA 2013) in ReplicationWiki

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