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The Cyclical Volatility of Equilibrium Unemployment and Vacancies: Evidence from Italy

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  • Cardullo, Gabriele
  • Guerrazzi, Marco

Abstract

In this paper, we explore the fluctuations of unemployment and vacancies in the Italian labour market over the last twenty years. For reasons of data availability on unfilled job openings, this period is split in two parts. The former is covered by a help-wanted time series, while the latter is analyzed by means of a harmonized vacancy rate. In both periods, in line with previous findings on the unemployment volatility puzzle, we find that the labour market tightness indicator is much more volatile than productivity. Moreover, we show that a matching model with segmented labour markets and on-the-job search has the potential to provide a rationale for this pattern.

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  • Cardullo, Gabriele & Guerrazzi, Marco, 2013. "The Cyclical Volatility of Equilibrium Unemployment and Vacancies: Evidence from Italy," MPRA Paper 51726, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:51726
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    Cited by:

    1. Amaral, Pedro S. & Tasci, Murat, 2016. "The cyclical behavior of equilibrium unemployment and vacancies across OECD countries," European Economic Review, Elsevier, vol. 84(C), pages 184-201.
    2. Marco Guerrazzi & Ilham Ksebi, 2019. "Measuring Unemployment by Means of Official Data and Administrative Records: Empirical and Theoretical Perspectives," QUADERNI DI ECONOMIA DEL LAVORO, FrancoAngeli Editore, vol. 2019(110), pages 17-49.
    3. Guerrazzi, Marco, 2014. "Workforce ageing and the training propensity of Italian firms: cross-sectional evidence from the INDACO survey," MPRA Paper 56826, University Library of Munich, Germany.
    4. Josué Diwambuena & Raquel Fonseca & Stefan Schubert, 2021. "Italian Labour Frictions and Wage Rigidities in an Estimated DSGE," BEMPS - Bozen Economics & Management Paper Series BEMPS88, Faculty of Economics and Management at the Free University of Bozen.
    5. Ortego-Marti, Victor, 2017. "The Cyclical Behavior Of Unemployment And Vacancies With Loss Of Skills During Unemployment," Macroeconomic Dynamics, Cambridge University Press, vol. 21(6), pages 1277-1304, September.

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    More about this item

    Keywords

    Macroeconomic fluctuations; Italian labour market; Shimer puzzle; Market segmentation; On-the-job search.;
    All these keywords.

    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • 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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