A Search Theory of Sectoral Reallocation

Chang, Briana

doi:10.2139/ssrn.1748623

Cited by 12 publications

(5 citation statements)

References 14 publications

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“…Our finding of a countercyclical underemployment rate relates to an old literature on "cyclical upgrading"-the possibility that the quality of matches improves in tighter labor markets (Reder 1955;Okun 1973)-and is consistent with recent evidence by (Beaudry, Green, and Sand 2013) and (Abel and Deitz forthcoming) for the United States. 3 More generally, the counter-cyclicality of underemployment echoes the counter-cyclicality of mismatch (Şahin et al 2014), and our paper relates to recent work on worker mobility across occupations or industries over the business cycle (Alvarez and Shimer 2011, Carrillo-Tudela and Visschers 2013, Chang 2011, Pilossoph 2012), although we focus on vertical mobility-between high-degree requirement and low-degree requirement occupations.…”

mentioning

confidence: 78%

Underemployment and the Trickle-Down of Unemployment

Barnichon

Zylberberg²

2019

American Economic Journal: Macroeconomics

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A substantial fraction of workers are underemployed, i.e., employed in jobs for which they are overqualified, and that fraction—the underemployment rate—is higher in recessions. To explain these facts, we build a search model with an endogenous “ranking” mechanism, in which high-skill applicants are systematically hired over less-skilled competing applicants. Some high-skill workers become underemployed in order to escape the competition for high-skill jobs and find a job more rapidly at the expense of less-skilled workers. Quantitatively, the model can capture the key characteristics of underemployment, notably the fact that both the underemployment rate and the wage loss associated with becoming underemployed increase in recessions. (JEL E24, E32, J24, J64)

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confidence: 78%

Underemployment and the Trickle-Down of Unemployment

Barnichon

Zylberberg²

2019

American Economic Journal: Macroeconomics

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“…In our context our assumption implies that changes in lending standards and …nancial frictions do not a¤ect the cost of hiring, such as wages of workers in human resources. 9 For a similar formalization of the mobility decision in a two-sector labor market model, see Chang (2012). matching function, m , has constant returns to scale, and it is strictly increasing and strictly concave with respect to each of its arguments.…”

Section: Environmentmentioning

confidence: 99%

“…The DM goods market involves bilateral random matching between retailers (…rms) and consumers (households). 11 Because each …rm corresponds to one job, the measure of …rms in the goods market in period t is equal to the measure of employed households in the goods producing sector, n g t . The matching probabilities for households and …rms are = (n g t ) and (n g t )=n g t , respectively.…”

Section: Environmentmentioning

confidence: 99%

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Financial frictions, the housing market, and unemployment

Branch

Petrosky-Nadeau

Rocheteau

2016

Journal of Economic Theory

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We develop a two-sector search-matching model of the labor market with imperfect mobility of workers, augmented to incorporate a housing market and a frictional goods market. Homeowners use home equity as collateral to …nance idiosyncratic consumption opportunities. A …nancial innovation that raises the acceptability of homes as collateral raises house prices and reduces unemployment. It also triggers a reallocation of workers, with the direction of the change depending on …rms'market power in the goods market. A calibrated version of the model under adaptive learning can account for house prices, sectoral labor ‡ows, and unemployment rate changes over 1996-2010. JEL Classi…cation: D82, D83, E40, E50

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“…. SeeRogerson et al (2005) for a classic survey Chang (2011). extends these models to have sectoral shocks.4 Hagedorn and Manovskii (2008).…”

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confidence: 99%