do labor market policies have displacement effects evidence from a clustered randomized experiment this article reports the results from a randomized experiment designed to evaluate the direct and indirect displacement impacts of job placement assistance on the labor market outcomes of young educated job seekers in france we use a two step design in the first step the proportions of job seekers to be assigned to treatment 0 25 50 75 or 100 were randomly drawn for each of the 235 labor markets e g cities participating in the experiment then in each labor market eligible job seekers were randomly assigned to the treatment following this proportion after eight months eligible unemployed youths who were assigned to the program were significantly more likely to have found a stable job than those who were not but these gains are transitory and they appear to have come partly at the expense of eligible workers who did not benefit from the program particularly in labor markets where they compete mainly with other educated workers and in weak labor markets overall the program seems to have had very little net benefits

extended benefits and the duration of ui spells evidence from the new jersey extended benefit program abstract this paper examines the impact on the duration of unemployment insurance receipt of a politically motivated program that offered 13 weeks of extended benefits for 6 months in 1996 using state level data and individual administrative records from before during and after the program we find that it raised the fraction of claimants who exhausted their regular benefits by 1 3 percentage points had the program run long enough to affect claimants from the first day of their spell the fraction exhausting would have risen by 7 percentage points and the average recipient would have collected regular benefits for one extra week

are airports engines of economic development a dynamic panel data approach this paper applies the dynamic panel data generalized method of moments estimator to the data on commercial passenger air traffic at all primary airports in the united states to evaluate the impact of traffic volume and number of destinations served with non stop flights on the key indicators of regional economic development we find that number of destinations served with non stop flights has a much clearer and more robust impact on level of employment number of business establishments and average wage in the region passenger traffic volume affects employment and average wage but not number of establishments at the sample median connecting a metropolitan statistical area with an extra destination keeping everything else constant creates 98 jobs and facilitates the opening of four new business establishments that employ people the corresponding numbers for the sample mean are 223 jobs and 15 businesses the impact of air travel on regional economic development is influenced by competition on the

recruiting intensity during and after the great recession national and industry evidence we measure job filling rates and recruiting intensity per vacancy at the national and industry levels from january 2001 to september 2011 using data from the job openings and labor turnover survey construction makes up less than 5 percent of employment but accounts for more than 40 percent of the large swings in the job filling rate during and after the great recession leisure hospitality accounts for nearly a quarter of the large drop in recruiting intensity during the great recession we show that industry level movements in job filling rates and recruiting intensity are at odds with the implications of the standard matching function in labor search theory but consistent with a generalized function that incorporates an important role for recruiting intensity per vacancy

balance of payments the harrod foreign trade multiplier and economic growth the european and north american experience 1970 85 1988 balance of payments the harrod foreign trade multiplier and economic growth the european and north american experience 1970 85 applied economics vol 20 no 12 pp 1635 1642

the harrod foreign trade multiplier and economic growth in asian countries the validity of the harrod foreign trade multiplier for 11 asian countries is tested the results obtained generally support thrilwall s specification of the multiplier this suggests in an open economy relevant economic management is the factor that manipulates the income elasticities of exports and imports

the macro effects of unemployment benefit extensions a measurement error approach by how much does an extension of unemployment benefits affect macroeconomic outcomes such as unemployment answering this question is challenging because u s law extends benefits for states experiencing high unemployment we use data revisions to decompose the variation in the duration of benefits into the part coming from actual differences in economic conditions and the part coming from measurement error in the real time data used to determine benefit extensions using only the variation coming from measurement error we find that benefit extensions have a limited influence on state level macroeconomic outcomes we apply our estimates to the increase in the duration of benefits during the great recession and find that they increased the unemployment rate by at most 0 3 percentage point

the general equilibrium impacts of unemployment insurance evidence from a large online job board abstract during the great recession u s unemployment benefits were extended by up to 73 weeks theory predicts that extensions increase unemployment by discouraging job search a partial equilibrium effect using data from the large job board careerbuilder com i find that a 10 increase in benefit duration decreased state level job applications by 1 but had no robust effect on job vacancies job seekers thus faced reduced competition for jobs a general equilibrium effect calibration implies that the general equilibrium effect reduces the impact of unemployment insurance on unemployment by 39

uncertainty driven labor market fluctuations abstract this paper explores uncertainty shocks as a driving force in a search and matching model of the labor market uncertainty takes the form of a noisy component in a firm s initial signal about job productivity greater uncertainty dampens job creation by increasing the risk of making the costly mistake of investing in jobs that will turn out to be unprofitable thus uncertainty shocks can cause labor market downturns lower vacancy rates lower job finding rates and higher unemployment numerical simulations examine the level of volatility and the cross correlations and autocorrelations of key u s labor market indicators that result from fluctuations driven by changes in uncertainty

job search and unemployment insurance new evidence from time use data article i nfo this paper provides new evidence on job search intensity of the unemployed in the u s modeling job search intensity as time allocated to job search activities the major findings are 1 the average u s unemployed worker devotes about 41 min to job search on weekdays which is substantially more than their european counterparts 2 workers who expect to be recalled by their previous employer search substantially less than the average unemployed worker 3 across the 50 states and d c job search is inversely related to the generosity of unemployment benefits with an elasticity between 1 6 and 2 2 4 job search intensity for those eligible for unemployment insurance ui increases prior to benefit exhaustion and 5 time devoted to job search is fairly constant regardless of unemployment duration for those who are ineligible for ui

market externalities of large unemployment insurance extension programs we provide evidence that unemployment insurance affects equilibrium conditions in the labor market which creates significant market externalities we provide a framework for identification of such equilibrium effects and implement it using the regional extension benefit program rebp in austria which extended the duration of ui benefits for a large group of eligible workers in selected regions of austria we show that non eligible workers in rebp regions have higher job finding rates lower unemployment durations and a lower risk of long term unemployment we discuss the implications of our results for optimal ui policy jel e24 j64 j65 r23

job search requirements effort provision and labor market outcomes abstract how effective are effort targets this paper provides novel evidence on the effects of job search requirements on effort provision and labor market outcomes based on large scale register data we estimate the returns to required job search effort instrumenting individual requirements with caseworker stringency identification is ensured by the conditional random assignment of job seekers to caseworkers we find that the duration of un and non employment both decrease by 3 if the requirement increases by one monthly application when instrumenting actual applications with caseworker stringency an additionally provided monthly application decreases the length of spells by 4 in line with theory we further find that the effect of required effort decreases in the individual s voluntary effort finally the requirement level causes small negative effects on job stability reducing the duration of re employment spells by 0 3 per required application we find a zero effect on re employment wages

the impact of the potential duration of unemployment benefits on the duration of unemployment abstract this paper examines the impact of the potential duration of unemployment insurance ui benefits on unemployment in the united states first we use a large sample of household heads to examine differences in the unemployment spell distributions of ui recipients and nonrecipients sharp increases in the escape rate from unemployment both through recalls and new job acceptances are apparent for ui recipients around the time of benefits exhaustion such increases are not apparent at similar points of spell duration for nonrecipients second our analysis of accurate administrative data from 12 states indicates that a one week increase in potential benefit duration increases the average duration of the unemployment spells of ui recipients by 0 16 to 0 20 weeks

balance of payments constrained growth a rejoinder to professor thirlwall professor thirlwall has argued that the growth rate of a country is constrained by the requirement that the external current account must broadly balance he maintains that a country s growth can be analysed using a dynamic harrod trade multiplier and that a country s long run growth rate y will approximate to the ratio of the rate of growth of exports x to the income elasticity of demand for imports a in a recent article in this journal mcgregor and swales 1985 doubts were expressed about the theoretical and empirical grounds on which thirlwall makes these claims in his reply thirlwall argues that such doubts are unfounded he clarifies his theory on a number of points he argues that his theory was subjected to inappropriate empirical tests and whilst accepting that equation 1 can be derived from a strict neoclassical model he invites the reader to choose between the plausibility of the neoclassical story as against the keynesian alternative

cash on hand and competing models of intertemporal behavior new evidence from the labor market this paper presents new tests of the permanent income hypothesis and other widely used models of household behavior using data from the labor market we estimate the excess sensitivity of job search behavior to cash on hand using sharp discontinuities in eligibility for severance pay and extended unemployment insurance ui benefits in austria analyzing data for over one half million job losers we obtain three empirical results 1 a lump sum severance payment equal to two months of earnings reduces the job finding rate by 8 12 on average 2 an extension of the potential duration of ui benefits from 20 weeks to 30 weeks similarly lowers job finding rates in the first 20 weeks of search by 5 9 and 3 increases in the duration of search induced by the two programs have little or no effect on subsequent job match quality using a search theoretic model we show that estimates of the relative effect of severance pay and extended benefits can be used to calibrate and test a wide set of intertemporal models our estimates of this ratio are inconsistent with the predictions of a simple permanent income model as well as naive rule of thumb behavior the representative job searcher in our data is 70 of the way between the permanent income benchmark and credit constrained behavior in terms of sensitivity to cash on hand

forecasting unemployment across countries the ins and outs abstract this paper evaluates the flow approach to unemployment forecasting proposed by barnichon and nekarda 2012 for a set of oecd countries characterized by very different labor markets we find that the flow approach yields substantial improvements in forecast accuracy over professional forecasts for all countries with especially large improvements at longer horizons one year ahead forecasts for european countries moreover the flow approach has the highest predictive ability during recessions and turning points when unemployment forecasts are most valuable

equity and efficiency in rationed labor markets the social welfare implications of income tax policy are shown to critically depend on whether or not labor markets are rationed i e on the existence of involuntary unemployment with rationed labor markets raising taxes on the employed and transfers to the unemployed might improve both equity and efficiency it improves equity by redistributing income from the employed to the unemployed it improves efficiency as it encourages people with a small utility surplus of employment to exit the labor market leaving their jobs for people with a higher utility surplus i derive conditions under which this result continues to hold when only part of the labor market is rationed when there is both frictional and rationing unemployment and when rationing endogenously follows from trade unions monopoly power

does reducing unemployment insurance generosity reduce job match quality abstract this paper analyzes how a change in slovenia s unemployment insurance law affected the quality of jobs workers found after periods of unemployment taking advantage the natural experiment we show through difference in differences estimation results that reducing the potential duration of unemployment benefits had no detectable effect on wages on the probability of securing a permanent rather than a temporary job or on the duration of the post unemployment job

europe s hunger games income distribution cost competitiveness and crisis the dominant view both on the mainstream right and on the left holds that the eurozone crisis is a crisis of labour cost competitiveness with trade imbalances and hence foreign indebtedness being driven by divergences in relative unit labour costs rulcs between surplus and deficit countries to re balance eurozone growth the mainstream solution is a deflationary policy of internal devaluation i e cutting the wage share by as much as 30 in the deficit countries the progressive view holds that the surplus countries should adjust by raising their wage shares we argue that both sides of this debate are wrong and unhelpful europe s trade imbalances are determined by domestic and world demand whilst rulc divergences play only a negligible role eurozone growth can only be revived when eurozone demand growth is restored not by lowering wages here and or raising them there the current deflationary adjustment forced on the wage led economies of greece italy portugal and spain is self destructive it is a confidence killer not only deepening the free fall of southern european incomes but also damaging their productive base and productivity growth the outlook is depressing further increases in already high unemployment rates inequality measures and poverty rates inconceivable in prosperous europe just a few years ago and arguably dystopian

airport expansions and property values the case of chicago o hare airport abstract the paper adds to the empirical literature by providing up to date estimates of the effect of airport noise on property values around one of the world s busiest airports chicago o hare the results indicate that home values were about 9 lower within a 65 db noise contour band of o hare in 1997 opponents of airport expansions argue that increased noise will reduce property values and lower tax bases the results of this paper suggest that aircraft are becoming so much quieter that the airport can be expanded without causing a drop in local property values or tax bases estimates suggest that house prices may rise by as much as 284 6 million in the densely populated area around o hare after a new runway is added to the airport

time variation in the dynamics of worker flows evidence from north america and europe vector autoregressive methods have been used to model the interrelationships between job vacancy rates job separation rates and job finding rates using tools such as impulse response analysis we investigate whether such impulse responses change across the business cycle or over time by estimating time varying parameter vector autoregressions for data from north america the usa and canada and europe france spain and the uk while the adjustment process of the labour market to shocks in canada and the usa is similar we find the adjustment process differs much more across the european countries with greater persistence in shocks relative to the usa and canada

do matching frictions explain unemployment not in bad times this paper models unemployment as the result of matching frictions and job rationing job rationing is a shortage of jobs arising naturally in an economic equilibrium from the combination of some wage rigidity and diminishing marginal returns to labor during recessions job rationing is acute driving the rise in unemployment whereas matching frictions contribute little to unemployment intuitively in recessions jobs are lacking the labor market is slack recruiting is easy and inexpensive so matching frictions do not matter much in a calibrated model cyclical fluctuations in the composition of unemployment are quantitatively large

the effects of extended unemployment insurance over the business cycle evidence from regression discontinuity estimates over 20 years one goal of extending the duration of unemployment insurance ui in recessions is to increase ui coverage in the face of longer unemployment spells although it is a common concern that such extensions may themselves raise nonemployment durations it is not known how recessions would affect the magnitude of this moral hazard to obtain causal estimates of the differential effects of ui in booms and recessions this article exploits the fact that in germany potential ui benefit duration is a function of exact age which is itself invariant over the business cycle we implement a regression discontinuity design separately for 20 years and correlate our estimates with measures of the business cycle we find that the nonemployment effects of a month of additional ui benefits are at best somewhat declining in recessions yet the ui exhaustion rate and therefore the additional coverage provided by ui extensions rises substantially during a downturn the ratio of these two effects represents the nonemployment response of workers weighted by the probability of being affected by ui extensions hence our results imply that the effective moral hazard effect of ui extensions is significantly lower in recessions than in booms using a model of job search with liquidity constraints we also find that in the absence of market wide effects the net social benefits from ui extensions can be expressed either directly in terms of the exhaustion rate and the nonemployment effect of ui durations or as a declining function of our measure of effective moral hazard copyright 2012 oxford university press

is internet job search still ineffective using national longitudinal survey of youth nlsy97 data for 2005 8 we find that unemployed persons who look for work online are re employed about 25 faster than comparable workers who do not search online this finding contrasts with previous results for 1998 2001 and is robust to controls for cognitive test scores and detailed indicators of internet access internet job search ijs appears to be most effective in reducing unemployment durations when used to contact friends and relatives to send out resumes or fill out applications and also to look at advertisements we detect a weak positive relationship between ijs and wage growth between jobs over the past decade the internet has been credited for substantial reductions in search frictions in markets ranging from life insurance to apartment rentals brown and goolsbee 2002 kroft and pope 2010 in contrast studies of the internet s effects on labour market matching have been few in number and on balance find little or no evidence of a friction reducing effect for example kuhn and skuterud 2004 find that unemployed workers who look for work online have longer unemployment durations than comparable non internet searchers whereas kroft and pope 2010 find no evidence that the rapid expansion of craigslist as a job search tool has affected city level unemployment rates 1 at least on the surface these results seem puzzling in view of the dramatic expansion of online job search sites as well as the general decline in communication costs associated with the internet both of these changes should increase the arrival rate of matches between job searchers and vacancies thereby reducing search frictions in labour markets in this study we provide new evidence relevant to this puzzle of ineffective internet job search ijs using data on young us jobseekers during the period 2005 8 taken from the national longitudinal survey of youth nlsy97 our main result is that internet searchers unemployment durations are about 25 shorter than comparable workers who search offline only specifically after replicating kuhn and skuterud s 2004 estimate of a counterproductive effect of ijs using their current population survey cps data from 1998 2001 for this age group we show that this counterproductive effect is reversed in the more recent period in the same regression specification this reversal holds whether or not we control for a possible source of endogenous selection searchers scores on a widely used cognitive skills test that was not available in the earlier data we speculate that improvements in technology over this period ranging from better online job sites to network externalities associated with greater overall internet penetration might explain this change over time

international trade and structural change abstract in light of the substantial movement towards trade liberalization during the postwar period this paper attempts to determine if and when countries experienced statistically significant changes in the paths of their export gdp and import gdp ratios we find that 1 most trade ratios exhibited a structural break in their time paths 2 postbreak trade exceeded prebreak trade for the majority of countries 3 the coincidence in timing between the import and export breaks does not appear to be particularly strong and 4 there is little relation between the extent of changes in imports and the extent of changes in exports for most countries 1997 elsevier science b v

the effect of unemployment benefits and nonemployment durations on wages abstract we estimate that unemployment insurance ui extensions reduce reemployment wages using sharp age discontinuities in ui eligibility in germany we show this effect combines two key policy parameters the effect of ui on reservation wages and the effect of nonemployment durations on wage offers our framework implies if ui extensions do not affect wages conditional on duration then reservation wages do not bind we derive resulting instrumental variable estimates for the effect of nonemployment durations on wage offers and bounds for reservation wage effects the effect of ui on wages we find arises mainly from substantial negative nonemployment duration effects jel j31 j64 j65

mood swings and business cycles evidence from sign restrictions this paper provides new evidence that bouts of optimism and pessimism are an important source of u s business cycles using the identification schemes based on sign restrictions we document that identified optimism and pessimism shocks account for about 30 of u s business cycle fluctuations in hours and output in addition our empirical findings are consistent with the intensive and extensive margin adjustments in the u s labor market over business cycles providing further support to optimism shocks being an important source of u s business cycles the identified optimism shocks are at least partially rational as total factor productivity is found to rise 8 12 quarters after an initial bout of optimism while this later finding is consistent with some previous findings in the news shock literature we cannot rule out that such episodes reflect self fulfilling beliefs

thirlwall s law and balance of payments constrained growth more on the debate the various criticisms that have levelled against thirlwall s law by mcgregor and swales are examined it is shown that their arguments are untenable the relationship between the necolassical law of one price and thirlwall s law is clarified thirlwall s law is not overwhelmingly rejected by the evidence as mcgregor and swales assert their suppression of the influence of the price term on the estimates used in the test proposed by mccombie is inappropriate their regression analyis is also mid specified and a preferable specification provides no support for their conclusions they repeatedly argue that thirlwall s modele cannot account for changes in market shares and the that the estimated income elasticities of demand for exports and imports cannot capture the effects of non price competition this was shown to be erroneous by mccombie and the reasons advanced are further elaborated mcgregor and swales provide another interpretation of the relationship between thirlwll s law and the harrod foreign tr

revisiting the matching function abstract there is strong empirical evidence for cobb douglas matching functions we show in this paper that this widely found relation between matches on the one hand and unemployment and vacancies on the other hand can be the result of different underlying mechanisms obviously it can be generated by assuming a cobb douglas matching function less obvious the same relationship results from a vacancy free entry condition and idiosyncratic productivity shocks a positive aggregate productivity shock leads to more vacancy posting a shift of the idiosyncratic selection cutoff and thereby more hiring we calibrate a model with both mechanisms to administrative german labor market data and show that idiosyncratic productivity for new contacts is an important driver of the elasticity of the job finding rate with respect to the market tightness accounting for idiosyncratic productivity can explain the observed negative time trend in estimated matching efficiency and asymmetric business cycle responses to large aggregate shocks

factor complementarity and labour market dynamics abstract we propose and estimate a dynamic stochastic general equilibrium model featuring search and matching frictions deep habits and a ces production function the model successfully replicates the cyclical properties of labour market variables in the us economy for three main reasons first two of the endogenous mechanisms of the model factor complementarity and unemployment benefits play a key role for explaining the amplification in unemployment and vacancies second deep habits have a smaller but significant role as an endogenous mechanism third capital augmenting productivity investment specific and matching efficiency innovations explain large part of the variation in labour market variables

thirlwall law and balance of payments constrained growth further comment on the debate this paper reviews the debate that has occurred in applied economics over thirlwall s law mccombie 1989 mcgregor and swales 1985 1986 thirlwall 1986 the empired evidence concering the validity of the law is re assessed using a variety of tests including that suggested by mccombie 1989 and the new data set provided by bairam 1988 the law is overwhelmingly rejected by the evidence contrary to the conclusions of mccombie and bairam the rationale for the assumption of constant relative prices which is required to derive thirlwall s law is reconsidered the original law of one price rationale renders the approach incoherent the more recent rationale of sticky oligopolistic price improves the internal consistency of the model but necessitates consideration of non price competition however neither the theory underlying thirlwall s law nor empirical tests of the law property account for this in principle the law cannot be employed to distinguish between demanding constrained and supply co

vacancy posting job separation and unemployment fluctuations abstract what is the relative importance of hiring and separation in driving unemployment fluctuations this paper presents a framework to decompose the moments of unemployment and study the respective contributions of vacancy posting a measure of firms hiring efforts and separation separation accounts for about 40 of unemployment s variance compared to 60 for vacancy posting and contributes to about 60 of unemployment steepness asymmetry the fact that unemployment increases faster than it decreases further while vacancy posting is on average the most important contributor of unemployment fluctuations the opposite is true around business cycle turning points when separation is responsible for most of unemployment movements

unemployment benefits unemployment duration and post unemployment jobs a regression discontinuity approach structural unemployment appears to be strongly correlated with the potential duration of unemployment across organization for eco nomic co operation and development oecd countries stephen nickell and richard layard 1999 the idea is that extended benefit duration discourages searching for a job and thus leads to prolonged unemployment in this paper i propose testing this idea by studying discontinuous changes in benefit dura tion at the age of 50 which are embedded in the austrian unemployment insurance system in particular job seekers who become unem ployed at 50 years of age or older and satisfy a previous work requirement are eligible for 52 weeks of extended benefits rather than 39 weeks moreover due to special restructuring demands in the state owned steel sector austria temporarily implemented a regional extended benefit program rebp covering job seekers who enter unemployment at 50 years of age or older who had been living in certain regions of austria for at least six months and who satisfy a previous work requirement those individuals were eligible for 209 weeks of benefits instead of 39 weeks austrian unemployment insurance rules create a rich design allowing us to study the effects of small increases in benefits by 13 weeks 39 to 52 weeks in regions that were excluded from the extended benefit program and large benefit extensions by 170 weeks 39 weeks to 209 weeks in regions with access to the extended benefit program because these benefit entitlement rules were discontinuous in age the corresponding causal effects can be identified in a regression discontinuity framework this paper contributes to two strands of the literature the first strand is concerned with measuring the effects of potential benefit dura tion on unemployment duration recent con tributions to this literature include david card unemployment benefits unemployment duration and post unemployment jobs a regression discontinuity approach

testing for cointegration power versus frequency of observation further monte carlo results abstract this paper studies the effects of increasing the frequency of observation and the data span on the johansen cointegration tests the ability of the tests to detect cointegration depends more on the total sample length than the number of observations

home equity mobility and macroeconomic fluctuations how does a fall in house prices affect real activity this paper presents a business cycle model in which a decline in house prices reduces geographical mobility creating distortions in the labor market this happens because homeowners face declines in their home equity levels after which it becomes more difficult to provide the down payment required for a new mortgage loan unemployed homeowners therefore turn down job offers that would require them to move the model explains joint cyclical patterns in housing and labor market aggregates as well as the puzzling breakdown of the u s beveridge curve that occurred during 2009

static versus dynamic specifications and the harrod foreign trade multiplier the validity of the harrod foreign trade multiplier is tested using new econometric techniques the equations obtained still support the conclusions drawn from the results obtained in the past

debt hangover in the aftermath of the great recession following the great recession u s government debt levels exceeded 100 of output we develop a macroeconomic model to evaluate the role of various shocks during and after the great recession labor market shocks have the greatest impact on macroeconomic activity we then evaluate the consequences of using alternative fiscal policy instruments to implement a fiscal austerity program to return the debt output ratio to its pre great recession level our welfare analysis reveals that there is not much difference between applying fiscal austerity through government spending the labor income tax or the consumption tax using the capital income tax is welfare reducing

cointegration and unit roots this paper provides an updated survey of a burgeoning literature on testing estimation and model specification in the presence of integrated variables integrated variables are a specific class of non stationary variables which seem to characterise faithfully the properties of many macroeconomic time series the analysis of cointegration develops out of the existence of unit roots and offers a generic route to test the validity of the equilibrium predictions of economic theories special emphasis is put on the empirical researcher s point of view

public sector capital and the productivity puzzle a number of studies have suggested a quantitatively important relationship between public sector capital accumulation and private sector productivity with the most compelling evidence derived from analyses of state level data estimates herein of production functions that use standard techniques to control for unobserved state specific characteristics however reveal essentially no role for public sector capital in affecting private sector productivity only estimates of state production functions that do not include such controls find substantial productivity impacts this result reconciles existing econometric estimates with the findings of hulten and schwab based on growth accounting techniques as such techniques effectively control for state specific effects region level estimates are essentially identical to those from state data suggesting no quantitatively important spillover effects across states copyright 1994 by mit press

building a composite help wanted index abstract this paper builds a measure of vacancy posting over 1951 2009 that captures the behavior of total print and online help wanted advertising and can be used for time series analysis of the us labor market

duration dependence and labor market conditions evidence from a field experiment this article studies the role of employer behavior in generating negative duration dependence the adverse effect of a longer unemployment spell by sending fictitious resumes to real job postings in 100 u s cities our results indicate that the likelihood of receiving a callback for an interview significantly decreases with the length of a worker s unemployment spell with the majority of this decline occurring during the first eight months we explore how this effect varies with local labor market conditions and find that duration de pendence is stronger when the local labor market is tighter this result is consistent with the prediction of a broad class of screening models in which employers use the unemployment spell length as a signal of unobserved productivity and recognize that this signal is less informative in weak labor markets jel code j64

unemployment fluctuations over the life cycle abstract in this paper we show that i the volatility of worker flows increases with age in us cps data and ii a search and matching model with life cycle features endogenous separation and search effort is well suited to explain this fact with a shorter horizon on the labor market older workers outside options become less responsive to new employment opportunities thereby making their wages less sensitive to the business cycle their job finding and separation rates are then more volatile along the business cycle the horizon effect cannot explain the significant differences between prime age and young workers as both age groups are far away from retirement a lower bargaining power on the youth labor market brings the model closer to the data

airfreight transport and economic development an examination of causality the paper examines the potential role that airfreight transport in the us can play in stimulating local and regional economic development the analysis examines trends in employment and income for metropolitan statistical areas that make use of airfreight services the focus is on causality and not on simple correlation and uses econometric analysis rather than simpler economic multiplier approaches granger causality testing based on panel data covering 35 airport and 32 metropolitan statistical areas in the us from 1990 to 2009 indicates that airfreight transport was a positive driver for local economic development the conclusions focus on the strengths but also the weaknesses of the methodology for assessing causality

reprint of the pros and cons of sick pay schemes testing for contagious presenteeism and noncontagious absenteeism behavior abstract this paper provides an analytical framework and uses data from the u s and germany to test for the existence of contagious presenteeism and negative externalities in sick leave insurance the first part exploits high frequency google flu data and the staggered implementation of u s sick pay mandates to show using a reduced form framework that population level influenza like disease rates decrease after employees gain access to paid sick leave next a simple theoretical framework provides evidence on the underlying behavioral labor supply mechanisms the model theoretically decomposes overall labor supply adjustments moral hazard into contagious presenteeism and noncontagious absenteeism behavior and derives testable conditions the last part illustrates how to implement the model exploiting a german sick pay reform and administrative industry level data on certified sick leave by diagnosis the empirical test finds that the labor supply elasticity for contagious diseases is significantly smaller than for noncontagious diseases under the identifying assumptions of the model this finding provides additional indirect evidence for the existence of contagious presenteeism

is public expenditure productive abstract this paper considers the relationship between aggregate productivity and stock and flow government spending variables the empirical results indicate that i the nonmilitary public capital stock is dramatically more important in determining productivity than is either the flow of nonmilitary or military spending ii military capital bears little relation to productivity and iii a core infrastructure of streets highways airports mass transit sewers water systems etc has most explanatory power for productivity the paper also suggests an important role for the net public capital stock in the productivity slowdown of the last fifteen years

monetary policy trend inflation and unemployment volatility the literature has long agreed that the dmp model after diamond 1982 mortensen 1982 pissarides 1985 with search and matching frictions in the labor market can deliver large volatilities in labor market quantities consistent with empirical data only if there is at least some wage stickiness i show however that the model can deliver nontrivial volatilities without wage stickiness as long as it has price dispersion and nonzero long run inflation rates i find that by keeping inflation at a positive rate monetary policy may be accountable for the large standard deviations observed on labor market variables in addition the shimer 2005 puzzle disappears under monetary policy shocks

sectoral differences in the use of information technology and matching efficiency in the us labour market the present study examines how the heterogeneity of use of information technology in production affects the probability that an unemployed worker will be matched with a vacancy using us time series from 1967 to 2007 i construct measures of dispersion of the stocks of software and hardware per worker across 13 industries the measures exhibit three waves whose timing roughly corresponds to the diffusion of mainframe computers in the 1960s and 1970s personal computers in the 1980s and the internet in the late 1990s after controlling for other influences i find that the probability of transitioning from unemployment to employment responds negatively to an increase in either measure the results imply that by enhancing technical heterogeneity the diffusion of a new technology may suppress the job finding rate

the pros and cons of sick pay schemes testing for contagious presenteeism and noncontagious absenteeism behavior abstract this paper provides an analytical framework and uses data from the u s and germany to test for the existence of contagious presenteeism and negative externalities in sick leave insurance the first part exploits high frequency google flu data and the staggered implementation of u s sick pay mandates to show using a reduced form framework that population level influenza like disease rates decrease after employees gain access to paid sick leave next a simple theoretical framework provides evidence on the underlying behavioral labor supply mechanisms the model theoretically decomposes overall labor supply adjustments moral hazard into contagious presenteeism and noncontagious absenteeism behavior and derives testable conditions the last part illustrates how to implement the model exploiting a german sick pay reform and administrative industry level data on certified sick leave by diagnosis the empirical test finds that the labor supply elasticity for contagious diseases is significantly smaller than for noncontagious diseases under the identifying assumptions of the model this finding provides additional indirect evidence for the existence of contagious presenteeism

why has trade grown faster than income trade of the oecd countries has grown faster than income during the postwar period this paper tests a number of different hypotheses for the observed growth in the trade income ratio for small open economies increases in real output and international reserves as well as declines in tariff rates are associated with growth in the ratio there are important differences in the behavior of the trade ratio across time and country size

lost generations of firms and aggregate labor market dynamics abstract can the unprecedented lack of startups during the u s great recession have persistently negative effects while fewer firms hiring workers can mechanically reduce employment for many years this may be offset by feedback effects on lower wages slacker labor markets and higher profits an estimated model of firm dynamics and frictional labor markets suggests that such feedback effects are too weak to offset the direct impact of fewer startups had firm entry remained constant during the great recession output would have recovered 4 6 years earlier and unemployment would have been 0 5 percentage points lower even 10 years after the crisis

should unemployment insurance vary with the unemployment rate theory and evidence we study how the marginal welfare gain from increasing the unemployment insurance ui bene t level varies over the business cycle we do this by estimating how the moral hazard cost and the consumption smoothing bene t of ui vary with labor market conditions which we identify using variation in the interaction of ui bene t levels with the unemployment rate within u s states over time we nd that the moral hazard cost is procyclical greater when the unemployment rate is relatively low by contrast we do not nd evidence that the consumption smoothing bene t varies with the unemployment rate we use these empirical results to estimate the marginal welfare gain and we nd that it is modest on average but varies positively with the unemployment rate jel h5 j64 j65

do extended unemployment benefits lengthen unemployment spells evidence from recent cycles in the u s labor market in response to the recession of 2007 2009 the maximum duration of u s unemployment insurance ui benefits was extended to an unprecedented 99 weeks we exploit variation in the timing and size of the ui benefit extensions across states to estimate their overall impact on unemployment exits comparing the most recent and prior extension episodes we find a small but statistically significant increase in labor force attachment due to extended ui in both periods with little or no impact on job finding despite these small estimates extended benefits can account for a substantial share of the increase in long term unemployment

persistence and volatility of beveridge cycles this paper aims to explain the magnitude and cyclical behavior of the fluctuations in unemployment and vacancies adding demand externalities to an otherwise standard search and matching model reduces the need for exogenous shocks in explaining these fluctuations under plausible parameter values the equilibrium dynamics include a stable limit cycle that resembles the empirically observed counterclockwise cycles around the beveridge curve quantitatively these endogenous beveridge cycles can explain half of the volatility and almost all persistence of unemployment without any exogenous forces avoiding the amplification and propagation problems of the standard model

applications and interviews firms recruiting decisions in a frictional labour market i develop a directed search model to study the recruitment decisions of firms competing for workers who ex post differ in two dimensions 1 their match productivity and 2 their probability of accepting a job offer endogenously determined by their choice of application portfolio to attract these workers firms post a recruiting intensity and a hiring standard in addition to terms of trade a higher recruiting intensity is costly but allows the firm to select more applicants for an interview which reveals their productivity the hiring standard solves the tradeoff between immediate hiring and waiting for a potentially better match in the future i characterize equilibrium and find that various outcomes including uniqueness of equilibrium and the cyclicality of recruiting intensity crucially depend on firms recruiting cost and workers search cost calibration of the model to the u s labour market indicates a continuum of equilibria given selection of a particular equilibrium hiring standards are countercyclical while recruiting intensity is procyclical the calibrated model creates more amplification than a standard model without intensive margins and gives rise to procyclical match efficiency when viewed through the lens of a cobb douglas matching function

models of technology diffusion abstract the literature on new technology diffusion is vast and it spills over many conventional disciplinary boundaries this paper surveys the literature by focusing on alternative explanations of the dominant stylized fact that the usage of new technologies over time typically follows an s curve the most commonly found model which is used to account for this model is the so called epidemic model which builds on the premise that what limits the speed of usage is the lack of information available about the new technology how to use it and what it does the leading alternate model is often called the probit model which follows from the premise that different firms with different goals and abilities are likely to want to adopt the new technology at different times in this model diffusion occurs as firms of different types gradually adopt it there are actually many ways to generate an s curve and the third class of models which we examine are models of density dependence popularized by population ecologists in these models the twin forces of legitimation and competition help to establish new technologies and then ultimately limit their take up finally we look at models in which the initial choice between different variants of the new technology affect the subsequent diffusion speed of the chosen technology such models often rely on information cascades which drive herd like adoption behaviour when a particular variant is finally selected

airline traffic and urban economic development this paper provides new evidence on the link between airline traffic and employment in us metropolitan areas the evidence confirms the common view that good airline service is an important factor in urban economic development frequent service to a variety of destinations reflected in a high level of passenger enplanements facilitates easy face to face contact with businesses in other cities attracting new firms to the metro area and stimulating employment at established enterprises the empirical results show that a 10 per cent increase in passenger enplanements in a metro area leads approximately to a 1 per cent increase in employment in service related industries however airline traffic has no effect on manufacturing and other goods related employment suggesting that air travel is less important for such firms than for service related businesses these estimates are generated controlling for reverse causality between employment and traffic the results imply that expansion of chicago s o hare ai

hubs and high fares dominance and market power in the u s airline industry this article estimates the importance of route and airport dominance in determining the degree of market power exercised by an airline the results indicate that an airline s share of passengers on a route and at the endpoint airports significantly influences its ability to mark up price above cost the high markups of a dominant airline however do not create much of an umbrella effect from which carriers with smaller operations in the same markets can benefit the article suggests a number of possible explanations for this asymmetry

the balance of payments constrained growth rate and the natural rate of growth new empirical evidence this paper implements a panel approach to investigate the empirical relevance of thirlwall s law which states that long run growth must be consistent with balance of payments bop equilibrium and is thus determined on the demand side building on ardl modelling mean group and pooled mean group estimation methods we use annual data over the 1960 2010 years for a panel of 22 oecd countries and find significant support for the law next we also explore empirically the hypothesis that the bop constrained growth rate yb must equal the natural or potential rate of growth yn and find that the data do not reject this hypothesis finally we adopt a new approach based on panel granger causality methods to explore the direction of causality between yb and yn the results indicate the existence of unidirectional long run causality from yb to yn thus reinforcing the view embodied in the law that long run growth is demand determined and constrained by the bop

goodwin cycles and the bopc growth paradigm a macrodynamic model of growth and fluctuations abstract the paper builds a non linear macrodynamic model to study the relation between the functional distribution of income technological progress and economic growth in the short term the interaction between the productivity regime the demand regime and the distributive conflict generates cyclical paths a la goodwin in the long term output growth rate is constrained by the balance of payments a la thirlwall in which the elasticities of foreign trade are modeled as a function of the complex relation between the wage share and the innovation capabilities of theeconomy

providing advice to jobseekers at low cost an experimental study on online advice we develop and evaluate experimentally a novel tool that redesigns the job search process by providing tailored advice at low cost we invited jobseekers to our computer facilities for twelve consecutive weekly sessions to search for real jobs on our web interface for one half instead of relying on their own search criteria we use readily available labour market data to display relevant alternative occupations and associated jobs the data indicate that this broadens the set of jobs they consider and increases their job interviews especially for participants who otherwise search narrowly and have been unemployed for a few months

worker search effort as an amplification mechanism abstract it is well known that the diamond mortensen pissarides model exhibits a strong trade off between cyclical unemployment fluctuations and the size of rents to employment introducing endogenous job search effort reduces the strength of the trade off while bringing the model closer to the data ignoring worker search effort leads to a large upward bias in the elasticity of matches with respect to vacancies merging the american time use survey and the current population survey new evidence in support of procyclical search effort is presented average search effort of the unemployed is subject to cyclical composition biases

structural changes cointegration and the empirics of thirlwall s law thirlwall s law establishes a relation between the long run growth rate the growth of exports and the long run income elasticity of imports the estimation of this parameter requires cointegration techniques which in turn require a large span of data thus exposing the estimates to risks of structural changes while this problem has been recognized in the literature the evidence produced is still partial being concerned with a very limited number of countries and in some respects unsatisfactory in this article we fill this gap by assessing thirlwall s empirical regularity on a sample of 22 organization for economic cooperation and development oecd countries using econometric techniques that allow for the presence of a shift of unknown date in the long run parameters the results are generally supportive of thirlwall s hypothesis and allow us to reconcile and qualify the evidence provided in the existing literature

upskilling do employers demand greater skill when workers are plentiful using a proprietary database of online job postings we find that education and experience requirements rose during the great recession these increases were larger in states and occupations that e

thirlwall s law and balance of payments constrained growth a comment on the debate 1989 thirlwall s law and balance of payments constrained growth a comment on the debate applied economics vol 21 no 5 pp 611 629

the dominant firm advantage in multiproduct industries evidence from the u s airlines in many industries the largest firms are most successful in entering and competing in individual markets or submarkets while this success is often attributed to cost or quality differences it may also reflect reputation advantages or marketing strategies that benefit firms selling a wider variety of products in the industry i present an approach to estimating the advantages of a dominant firm in the airline industry that allows one to effectively control for cost and quality heterogeneity results using data from 1986 indicate that an airline with a dominant presence at an airport will have a significant advantage in attracting customers whose trips originate at that airport regardless of the specific route on which the customer is traveling

unemployment fluctuations match quality and the wage cyclicality of new hires we revisit the issue of the high cyclicality of wages of new hires we show that after controlling for composition effects likely involving procyclical upgrading of job match quality the wages of new hires are no more cyclical than those of existing workers the key implication is that the sluggish behaviour of wages for existing workers is a better guide to the cyclicality of the marginal cost of labour than is the high measured cyclicality of new hires wages unadjusted for composition effects key to our identification is distinguishing between new hires from unemployment versus those who are job changers we argue that to a reasonable approximation the wages of the former provide a composition free estimate of the wage flexibility while the same is not true for the latter we then develop a quantitative general equilibrium model with sticky wages via staggered contracting on the job search and heterogeneous match quality and show that it can account for both the panel data evidence and aggregate evidence on labour market volatility

mismatch shocks and unemployment during the great recession summary we investigate the macroeconomic consequences of fluctuations in the effectiveness of the labor market matching process with a focus on the great recession we conduct our analysis in the context of an estimated medium scale dynamic stochastic general equilibrium model with sticky prices and equilibrium search unemployment that features a shock to the matching efficiency or mismatch shock we find that this shock is not important for unemployment fluctuations in normal times however it plays a somewhat larger role during the great recession when it contributes to raise the actual unemployment rate by around 1 3 percentage points and the natural rate by around 2 percentage points the mismatch shock is the dominant driver of the natural rate of unemployment and explains part of the recent shift of the beveridge curve copyright 2016 john wiley sons ltd

thirlwall and balance of payments constrained growth this paper outlines the theory which thirlwall uses to determine the growth of domestic income and argues that crucial elements of this theory appear to be very weak the empirical evidence presented by thirlwall to support his argument for balance of payments constrained growth is considered

does extending unemployment benefits improve job quality contrary to standard search models predictions past studies have not found a positive effect of unemployment insurance ui on reemployment wages we estimate a positive ui wage effect exploiting