The Cyclicality of Job Search Effort in Matching Models

Alper Çenesiz; Luis Guimaraes

doi:10.1093/oep/gpac001

The Cyclicality of Job Search Effort in Matching Models

Alper Çenesiz, Luis Guimaraes

Queen's Business School (QBS)

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Abstract

The canonical matching model is the workhorse model of the labour market but lacks a proper amplification mechanism for productivity shocks. One way to amplify the effects of shocks is to allow workers to endogenously adjust their job search effort: as search effort is procyclical in the canonical model, volatilities increase. Yet, the empirical literature points against procyclical search effort, raising doubts of how acyclical (or countercyclical) search effort can coincide with volatile labour market variables in matching models. We show that they can coincide in a model with procyclical value of leisure and alternating-offer wage bargaining.

Original language	English
Journal	Oxford Economic Papers
DOIs	https://doi.org/10.1093/oep/gpac001
Publication status	Published - 02 Feb 2022

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10.1093/oep/gpac001Licence: CC BY

The cyclicality of job search effort in matching models
Copyright 2022 the authors. This is an open access article published under a Creative Commons Attribution License (https://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium, provided the author and source are cited.
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The Cyclicality of Job Search Effort in Matching Models

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