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Improving estimates of job matching efficiency with different measures of unemployment

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  • Crawley, Andrew
  • Welch, Sarah
  • Yung, Julieta

Abstract

Traditional measures of unemployment can mask important changes in the labor market across time. We therefore use broader definitions of unemployment to estimate time-varying job-matching efficiency rates that are consistent with vacancies and hiring activity data for the U.S. Our efficiency rates are then modelled along with employment data to study their dynamic, non-linear relationship. We find that including marginally attached workers and part-time workers for economic reasons helps explain the changes in employment patterns observed after the global financial crisis. This finding emphasizes the importance of accounting for labor underutilization, particularly during the latest economic recovery.

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  • Crawley, Andrew & Welch, Sarah & Yung, Julieta, 2021. "Improving estimates of job matching efficiency with different measures of unemployment," Journal of Macroeconomics, Elsevier, vol. 67(C).
    • Handle: RePEc:eee:jmacro:v:67:y:2021:i:c:s0164070420302032
    DOI: 10.1016/j.jmacro.2020.103282
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    2. René Böheim & Michael Christl, 2021. "Mismatch unemployment in Austria," Economics working papers 2021-06, Department of Economics, Johannes Kepler University Linz, Austria.

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    More about this item

    Keywords

    Beveridge curve; u6 unemployment; Job matching efficiency; MGARCH model; Dynamic correlations; labor underutilization;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • 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
    • C58 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Financial Econometrics

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