Labor Market Dynamics: A Time‐Varying Analysis1. (5th March 2015)

• Record Type: Journal Article
• Authors: Mumtaz, Haroon; Zanetti, Francesco
• Is Part Of: Oxford bulletin of economics and statistics. Volume 77:Number 3(2015:Jun.)
• Page Start: 319
• Page End: 338
• Publication Date: 2015-03-05
• Subjects: Economic history -- Periodicals; Great Britain -- Economic conditions -- Periodicals; 330.9
• DOI: 10.1111/obes.12096
• Languages: English
• ISSNs: 0305-9049

Abstract

Abstract : This paper studies how key labour market stylized facts and the responses of labour market variables to technology shocks vary over the US postwar period. It uses a benchmark dynamic, stochastic, general equilibrium model enriched with labour market frictions and investment‐specific technological progress that enables a novel identification scheme based on sign restrictions on a SVAR with time‐varying coefficients and stochastic volatility. Key findings are: (i) the volatility in job finding and separation rates has declined over time, while their correlation varies across time; (ii) the job finding rate plays an important role for unemployment, and the two series are strongly negatively correlated over the sample period; (iii) the magnitude of the response of labour market variables to technology shocks varies across the sample period.