Price Rigidity and the Volatility of Vacancies and Unemployment

The successful matching model developed by Mortensen and Pissarides seems to find its hardest task in explaining the cyclical movements of some key labor market variables such as the vacancy rate and the vacancy-unemployment ratio. Several authors have discussed mechanisms compatible with the matching technology that are able to deliver the kind of correlations observed in the data. In this paper we explore four such additional mechanisms embedded in a full blown SDGE model. We find that price rigidity greatly improves the model's empirical performance making it capable of reproducing second moments of the data. Other components such as intertemporal substitution, endogenous match destruction, capital accumulation and distortionary taxes also play a relevant role.unemployment, vacancies, business cycle, price rigidities

Household Leverage and Fiscal Multipliers

We study the size of fiscal multipliers in response to a government spending shock under different household leverage conditions in a general equilibrium setting with search and matching frictions. We allow for different levels of household indebtedness by changing the intensive margin of borrowing (loan-to-value ratio), as well as the extensive margin, defined as the number of borrowers over total population. The interaction between the consumption decisions of agents with limited access to credit and the process of wage bargaining and vacancy posting delivers two main results: (a) higher initial leverage makes it more likely to find output multipliers higher than one; and (b) a positive government expenditure shock always produces a positive multiplier for vacancies and employment. The latter result is in sharp contrast with models in which some households do not have access to the financial market (RoT consumers), in which the implied labor market responses to fiscal shocks are inconsistent with the empirical evidence. We also find that the impact on GDP of consolidations is lower when consumers have a more limited capacity to borrow, and that increasing government spending in an episode of intense private deleveraging can still generate positive and significant effects on consumption and output, although the fiscal output (employment) multiplier decreases (increases) with the intensity of the credit crunch. In the model with indebted impatient households we also observe that output (employment) multipliers decrease (increase) markedly with the degree of shock persistence and increase with the degree of price stickiness.fiscal multipliers, private leverage, labour market search

Household Debt and Labor Market Fluctuations

The co-movements of labor productivity with output, total hours, vacancies and unemployment have changed since the mid 1980s. This paper offers an explanation for the sharp break in the fluctuations of labor market variables based on endogenous labor supply decisions following the mortgage market deregulation. We set up a search model with efficient bargaining and financial frictions, in which impatient borrowers can take an amount of credit that cannot exceed a proportion of the expected value of their real estate holdings. When borrowers’ equity requirements are low, the impact of a positive technology shock on the marginal utility of consumption is strengthened, which in turn results in lower hours per worker and higher wages in the bargaining process. This shift in labor supply discourages firms from opening vacancies, reducing the impact of the shock on employment. We simulate the effects of a continuous increase in both the loan-to-value ratio and the share of borrowers in total population. Our exercise shows that the response of labor market variables might have been substantially affected by the increase in household leverage in the US in the last twenty years.business cycle, labor market, borrowing restrictions

Labor Market Search, Housing Prices and Borrowing Constraints.

Mortgage market deregulation in the early 1980s coincided in time with a sharp break in the cyclical behavior of many variables related to housing and to the labor market. This paper analyses the joint dynamics of labor market variables, output and housing prices in a search model with efficient bargaining and financial frictions. In a setting of household heterogeneity, only mortgaged-backed loans are available for impatient households, whose borrowing cannot exceed a proportion of the expected value of their real estate holdings. This feature of the credit market, together with search and matching frictions in the labor market, establish a strong link between credit constraints and consumption that significantly affects labor market outcomes: hours, wages and vacancies. The model is also able to explain the comovements of housing prices with output, productive investment and consumption. Our analysis confirms that the response of labor market variables to technology shocks has been substantially affected by the changes in the nature and tightness of imperfections in credit markets that occurred in the early 1980s. Allowing for a housing price shock, in addition to the technology shock, the model is also able to explain the observed reduction in the correlation of housing prices with both output and private investment.general equilibrium, borrowing constraints, search frictions, housing prices

The effect of school quality on educational attainment and wages

The paper examines the effects of school pupil-teacher ratios and type of school on educational attainment and wages using the British National Child Development survey (NCDS). The NCDS is a panel survey which has followed a cohort of individuals born in March 1958, and has a rich set of background variables recorded throughout the individual's life. The results suggest that, once we control for ability and family background, the pupil-teacher ratio has no impact on educational qualifications or on male wages. It has an impact on women's wages at the age of 33, particularly those of low ability. We also find evidence that those who attend selective schools have better educational outcomes and, in the case of men, higher wages at the age of 33. The impact is higher for the type of individuals who are less likely not to attend selective schools, but for whom a comparison group does exist among those attending.

Tax Reforms and Labour-market Performance: An Evaluation for Spain using REMS

This paper uses REMS, a Rational Expectations Model of the Spanish economy designed by Boscá et al (2007), to analyse the effects of lowering the overall tax wedge to the level prevailing in the US. Our results partially confirm previous findings in the literature: a reduction in the overall tax wedge of 19.5 points, in order to reach the US levels, has a positive effect in the long run, increasing total hours by about 7 per cent and GDP by about 8 percentage points. In terms of GDP per adult, these results account for 1/4 of the gap with respect to the US, but imply a reduction of only one percentage point in the labour productivity gap. The rise in total hours per adult is explained by a similar increase in both hours per employee and the employment rate of about 3.5 percentage points, allowing hours per adult to converge to levels only slightly lower than those in the US.general equilibrium, tax wedge, tax reforms, fiscal policy, labour market

Reseñas

Obra ressenyada: Recaredo AGULLÓ ALBUIXECH ; Víctor AGULLÓ CALATAYUD ; Federico FUERTES BANACLOIG, La vida cotidiana en Siete Aguas desde Cavanilles hasta el Gran Fondo (1795-1985). Valencia: Ayuntamiento de Siete Aguas, 2014.En las Ciencias Sociales el estudio de la vida cotidiana es relativamente reciente y surge del interés por sacar a la luz lo que muchas veces queda oculto. Lo que va pasando mientras parece que no pasa nada. Con una pretensión que aúna lo divulgativo y lo académico, los autores recorren en este libro los más diversos aspectos que configuran la rica vida cotidiana de una localidad rural valenciana, Siete Aguas

Ciència ciutadana o ciutadanies científiques? Quatre models de participació en Ciència i Tecnologia

Aquest article ha rebut un ajut del Servei de Política Lingüística de la Universitat de València.En l'última dècada, la participació de la ciutadania en qüestions de ciència i tecnologia ha augmentat significativament. Aquest increment ha fet que cada vegada estiga més en ús l'expressió "ciència ciutadana". No obstant això, aquesta s'empra de manera indiscriminada, cosa que fa que siga més un concepte vistós que acadèmicament útil. Tot i que són dues les formes de "ciència ciutadana" que prevalen, una d'activista, més crítica, i l'altra d'aficionada, més integrada, les seues manifestacions són molt més heterogènies. Això fa difícil trobar un marc teòric que expliqui aquest fenomen, la qual cosa es reflecteix en la manca d"una terminologia més precisa, per anar més enllà de la constatació d"un canvi en la producció del coneixement i l´asimetria amb què el saber està repartit a la societat, i les seues conseqüències polítiques i simbòliques. En aquest treball es repassen els antecedents d"aquest fenomen, els seus condicionants socials i es fa una classificació de diverses formes de ciència ciutadana, enteses com a formes d"acció col lectiva. Finalment, a partir del creuament de dues de les seues dimensions bàsiques com són la política i la cognitiva, s'estableixen quatre models teòrics de participació social a la ciència