European unemployment and turbulence revisited in a matching model

Lars L. Ljungqvist, Thomas Sargent

    Research output: Contribution to journalArticle

    Abstract

    We recalibrate den Haan, Haefke, and Ramey's matching model to incorporate our preferred specification of turbulence as causing distinct dynamics of human capital after voluntary and involuntary job losses. Under our calibration, with high unemployment benefits, an increase in turbulence increases the unemployment rate and the duration of unemployment while leaving the inflow rate into unemployment roughly unchanged, mirroring features of European data in the 1980s and 1990s. The essential issue is that den Haan, Haefke, and Ramey specify that in turbulent times workers experiencing layoffs and quits are both subject to instantaneous skill losses, while we restrict instantaneous skill losses to laid-off workers.

    Original languageEnglish (US)
    Pages (from-to)456-468
    Number of pages13
    JournalJournal of the European Economic Association
    Volume2
    Issue number2-3
    StatePublished - Apr 2004

    Fingerprint

    Matching model
    Turbulence
    Unemployment rate
    European unemployment
    Workers
    Duration of unemployment
    Calibration
    Quits
    Job loss
    Unemployment benefits
    Human capital
    Layoffs

    ASJC Scopus subject areas

    • Economics, Econometrics and Finance(all)

    Cite this

    European unemployment and turbulence revisited in a matching model. / Ljungqvist, Lars L.; Sargent, Thomas.

    In: Journal of the European Economic Association, Vol. 2, No. 2-3, 04.2004, p. 456-468.

    Research output: Contribution to journalArticle

    Ljungqvist, Lars L. ; Sargent, Thomas. / European unemployment and turbulence revisited in a matching model. In: Journal of the European Economic Association. 2004 ; Vol. 2, No. 2-3. pp. 456-468.
    @article{4ba8a220997a47ffa6d80174361e5350,
    title = "European unemployment and turbulence revisited in a matching model",
    abstract = "We recalibrate den Haan, Haefke, and Ramey's matching model to incorporate our preferred specification of turbulence as causing distinct dynamics of human capital after voluntary and involuntary job losses. Under our calibration, with high unemployment benefits, an increase in turbulence increases the unemployment rate and the duration of unemployment while leaving the inflow rate into unemployment roughly unchanged, mirroring features of European data in the 1980s and 1990s. The essential issue is that den Haan, Haefke, and Ramey specify that in turbulent times workers experiencing layoffs and quits are both subject to instantaneous skill losses, while we restrict instantaneous skill losses to laid-off workers.",
    author = "Ljungqvist, {Lars L.} and Thomas Sargent",
    year = "2004",
    month = "4",
    language = "English (US)",
    volume = "2",
    pages = "456--468",
    journal = "Journal of the European Economic Association",
    issn = "1542-4774",
    publisher = "Wiley-Blackwell",
    number = "2-3",

    }

    TY - JOUR

    T1 - European unemployment and turbulence revisited in a matching model

    AU - Ljungqvist, Lars L.

    AU - Sargent, Thomas

    PY - 2004/4

    Y1 - 2004/4

    N2 - We recalibrate den Haan, Haefke, and Ramey's matching model to incorporate our preferred specification of turbulence as causing distinct dynamics of human capital after voluntary and involuntary job losses. Under our calibration, with high unemployment benefits, an increase in turbulence increases the unemployment rate and the duration of unemployment while leaving the inflow rate into unemployment roughly unchanged, mirroring features of European data in the 1980s and 1990s. The essential issue is that den Haan, Haefke, and Ramey specify that in turbulent times workers experiencing layoffs and quits are both subject to instantaneous skill losses, while we restrict instantaneous skill losses to laid-off workers.

    AB - We recalibrate den Haan, Haefke, and Ramey's matching model to incorporate our preferred specification of turbulence as causing distinct dynamics of human capital after voluntary and involuntary job losses. Under our calibration, with high unemployment benefits, an increase in turbulence increases the unemployment rate and the duration of unemployment while leaving the inflow rate into unemployment roughly unchanged, mirroring features of European data in the 1980s and 1990s. The essential issue is that den Haan, Haefke, and Ramey specify that in turbulent times workers experiencing layoffs and quits are both subject to instantaneous skill losses, while we restrict instantaneous skill losses to laid-off workers.

    UR - http://www.scopus.com/inward/record.url?scp=33747728403&partnerID=8YFLogxK

    UR - http://www.scopus.com/inward/citedby.url?scp=33747728403&partnerID=8YFLogxK

    M3 - Article

    VL - 2

    SP - 456

    EP - 468

    JO - Journal of the European Economic Association

    JF - Journal of the European Economic Association

    SN - 1542-4774

    IS - 2-3

    ER -