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A job ladder model with stochastic employment opportunities

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  • Jake Bradley
  • Axel Gottfries

Abstract

We set up a model with on‐the‐job search in which firms infrequently post vacancies for which workers occasionally apply. The model nests the standard job ladder and stock‐flow models as special cases, while remaining analytically tractable and easy to estimate from standard panel data sets. The parameters from a structurally estimated model on US data are significantly different from either the restrictions imposed by a stock‐flow or job ladder model. Imposing these restrictions significantly understates the search option associated with employment and are, unlike our model, inconsistent with recent survey evidence and declining job finding rates and starting wage with duration of unemployment, both of which are present in the data.

Suggested Citation

  • Jake Bradley & Axel Gottfries, 2021. "A job ladder model with stochastic employment opportunities," Quantitative Economics, Econometric Society, vol. 12(4), pages 1399-1430, November.
    • Handle: RePEc:wly:quante:v:12:y:2021:i:4:p:1399-1430
    DOI: 10.3982/QE1394
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    References listed on IDEAS

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    3. Bradley, Jake, 2022. "Worker-Firm Screening and the Business Cycle," IZA Discussion Papers 15017, Institute of Labor Economics (IZA).

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