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Worker-Firm Screening and the Business Cycle

Author

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  • Jake Bradley

    (University of Nottingham)

Abstract

To understand the co-movement of vacancies and employment, an equilibrium model with two-sided screening is developed. On one side of the market, both employed and unemployed workers can evaluate multiple job openings simultaneously and decide which ones to apply for. On the other side, firms assess multiple applicants and choose their preferred candidates. This model is calibrated to reflect the U.S. economy. Consistent with data, the model generates significant volatility in vacancies, unemployment, and labor market flows over the business cycle. Moreover, differences in the search behaviors of employed and unemployed workers offer a theoretical explanation for the shift in the Beveridge curve observed after the 2008 recession. (Copyright: Elsevier)

Suggested Citation

  • Jake Bradley, 2025. "Worker-Firm Screening and the Business Cycle," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 57, July.
  • Handle: RePEc:red:issued:20-388
    DOI: 10.1016/j.red.2025.101272
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    References listed on IDEAS

    as
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