Labor Market Dynamics with Endogenous Labor Force Participation and On-the-Job Search

Empirical evidence shows that worker flows in the U.S. labor market are very large. Previous studies have mainly focused on documenting and modeling worker flows between employment and unemployment only. However, these studies ignore other important labor flows including movements in and out of the...

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Bibliographic Details
Published in:Policy File 2012
Main Author: Tuzemen, Didem
Format: Report
Language:English
Subjects:
Federal Reserve Bank of Kansas City
Labor force/Employment
Online Access:Request full text
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Summary:Empirical evidence shows that worker flows in the U.S. labor market are very large. Previous studies have mainly focused on documenting and modeling worker flows between employment and unemployment only. However, these studies ignore other important labor flows including movements in and out of the labor force, and worker flows from one job directly to another job. Improving our understanding of this broader set of labor market flows is critical for assessing the merits of labor market policies such as unemployment insurance and minimum wage. This paper focuses on the broader set of worker flows.