The cyclicality of hires, separations, and job-to-job transitions

This paper measures the job-finding, separation, and job-to-job transition rates in the United States from 1948 to 2004. The job-finding and job-to-job transition rates are strongly procyclical and the separation rate is nearly acyclical, especially since 1985. The author develops a simple model in which unemployed workers search for jobs and employed workers search for better jobs. The model predicts that an increase in either the job-finding rate or the separation rate raises the job-to-job transition rate, which is qualitatively and quantitatively consistent with the available evidence. In contrast, if the job-finding rate were acyclical and the separation rate countercyclical, as is the conventional wisdom, the model predicts that the job-to-job transition rate would be counterfactually countercyclical.Job hunting ; Labor turnover

The Role of Social Ties in the Job Search of Recent Immigrants

We show that among workers whose network is weaker than formal (nonnetwork) channels, those finding a job through the network should have higher wages than those finding a job through formal channels. Moreover, this wage differential is decreasing in network strength. We test these implications using a survey of recent immigrants into Canada. At least at the lower end of an individual’s wage distribution above his reservation wage, finding a network job is associated with higher wages for those with weak networks, and the interaction between network strength and finding a job through the network is negative as predicted.Immigrants, Job Search, Social Networks, Strong Ties

Unemployment Dynamics and the Cost of Business Cycles

In this paper, we investigate whether business cycles can imply sizable effects on average unemployment. First, using a reduced-form model of the labor market, we show that job finding rate fluctuations generate intrinsically a non-linear effect on unemployment: positive shocks reduce unemployment less than negative shocks increase it. For the observed process of the job finding rate in the US economy, this intrinsic asymmetry is enough to generate substantial welfare implications. This result also holds when we allow the job finding rate to be endogenous, provided the structural model is able to reproduce the volatility of the job finding rate. Moreover, the matching model embeds other non-linearities which alter the average job finding rate and so the business cycle cost.business cycle costs, unemployment dynamics

Looking for a Job, Finding the Right Employee

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Gross Worker Flows in the Presence of Informal Labor Markets. The Mexican Experience 1987-2002

This paper applies recent advances in the study of labor market dynamics to a representative developing country with a large unregulated of "informal" sector, Mexico. It finds, first, that the formal salaried sector shows the same procyclical job finding rate and mildly countercyclical separation behavior identified in the recent US literature by Shimer (2005a) and Hall (2005). The unregulated informal sector, however, shows reasonable acyclicality in the job finding rate coupled with sharp countercyclical movements in the job separation rate, consistent with standard small firm dynamics and Davis and Haltiwanger (1992 and 1999). The differential behavior of regulated and unregulated sectors, and the finding of relative wage rigidity in the former, sheds suggestive light on the roots of countercyclical job finding behavior in the US. Second, the patterns of worker transitions between all sectors, formal and informal correspond to the job-to-job dynamics observed in the US and not to the traditional idea of informality constituting the inferior sector of a segmented market. That said, the counter cyclical job finding in the formal sector combined with the acyclical job finding in informality does lead to the latter absorbing relatively more labor during downturns, even as its increased separation rates drive movements in unemployment.Gross worker flows, Labor market dynamics, Informality, Developing Countries

Explaining Differences in Job Search Outcomes Between Employed and Unemployed Job Seekers

We use individual data for Great Britain over the period 1992-2009 to compare the probability that employed and unemployed job seekers find a job and the quality of the job they find. The job finding rate of unemployed job seekers is 50 percent higher than that of employed job seekers, and this difference remains even when controlling for differences in observable worker characteristics and job search behaviour. We present evidence suggesting that these differences in the job finding probability is caused by behavioural differences between employed and unemployed job seekers rather than differences in characteristics. Consistent with search theory, we find that employed job seekers are more selective in evaluating job offers and are therefore less likely to find a job offer acceptable; for example, they are less likely to accept low-wage and temporary jobs, or jobs that do not meet their working hour requirements.on-the-job search, unemployment, job-finding rate

Job contact networks and the ethnic minorities

This paper examines the job finding methods of different ethnic groups in the UK. The theoretical framework shows that less assimilated ethnic unemployed workers are more likely to use their friends and family as their main method of search but they have less chance of finding a job using this method compared to whites and more assimilated ethnic unemployed workers that use formal job search methods (adverts, employment agencies etc.). Using data from the UK Quarterly Labour Force Survey (QLFS), we test these hypotheses. Our empirical findings are consistent with the theory since they suggest that, though networks are a popular method of finding a job for the ethnic minorities, they are not necessarily the most effective either in terms of gaining employment or in terms of the level of job achieved. However, there are important differences across ethnic groups with the Pakistani and Bangladeshi groups and those born outside the UK (the least assimilated), losing out disproportionately from using personal networks

Australian labour market flows over the business cycle

This paper analyses the behaviour of Australian labour market transition rates. Since the early 1980s the job finding rate has been significantly more volatile and pro-cyclical than the job loss rate and is strongly pro-cyclical. The economic downturns in the early 1980s and early 1990s were associated with an up to 10 percentage point decline in the average job finding rate. In comparison, the recent economic downturn was associated with a less significant decline in the job finding rate. During these periods the job loss rate has shown less significant volatility. The findings of this paper suggest job search activities of workers are potentially more relevant in explaining the volatility of labour market variables such as the unemployment rate and whether emerging skills shortages can be addressed. Moreover, policies that assist job search and skills development of workers are important, as is the search intensity of workers.labor market flows; job finding rate; job search

Employment, mobility, and active labor market programs

Using a unique micro panel data set we investigate whether active labor market programs improve employment prospects and increase mobility in the longer run. We consider two prototype programs: job creation programs and training programs. We find that both programs reduce the chances of finding a job substantially. Moreover, both programs are associated with a locking-in effect: the probability of finding a job outside the home region decreases after program participation. However, this effect appears to stem exclusively from the decrease in the overall job finding rate.Subsidized employment; labor market training; program evaluation; employment; contracted mobility

New estimates of the risk and duration of registered unemployment in urban Russia

This paper examines whether deregistration from the employment office decreases unemployment duration. The study is based on Russian individual-level data from the Public Employment Office of Rostov-on-Don combined with information from the 2000 household survey. Using a proportional hazard model, I find a significant excess in job finding rates following employment office deregistration. The predicted risk of getting a job is non-monotonic and tends to decrease at longer duration intervals. An important finding is that only 29% of the unemployed obtained a job simultaneously with deregistering from the Public Employment Office. Others continued to search for job on their own