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The Macro-dynamics of Sorting between Workers and Firms

Author

Listed:
  • Jeremy Lise

    (University College London)

  • Jean-Marc Robin

    (Sciences-Po, Paris and University College London)

Abstract

We develop an equilibrium model of on-the-job search with ex-ante heterogeneous workers and firms, aggregate uncertainty and vacancy creation. The model produces rich dynamics in which the distributions of unemployed workers, vacancies and worker-firm matches evolve stochastically over time. We prove that the surplus function, which fully characterizes the match value and the mobility decision of workers, does not depend on these distributions. We estimate the model on US labor market data from 1951-2007 and predict the fit for 2008-12. We use the model to measure the cyclicality of mismatch between workers and jobs.

Suggested Citation

  • Jeremy Lise & Jean-Marc Robin, 2013. "The Macro-dynamics of Sorting between Workers and Firms," Working Papers 2013-012, Human Capital and Economic Opportunity Working Group.
    • Handle: RePEc:hka:wpaper:2013-012
    Note: MIP
    as

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    File URL: http://humcap.uchicago.edu/RePEc/hka/wpaper/Lise_Robin_2013_macro-dyn_workers-firms.pdf
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    References listed on IDEAS

    as
    1. Giuseppe Moscarini & Fabien Postel-Vinay, 2013. "Stochastic Search Equilibrium," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 80(4), pages 1545-1581.
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    More about this item

    Keywords

    On-the-job search; Heterogeneity; Aggregate fluctuations; Mismatch;
    All these keywords.

    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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