Interpreting the Beveridge curve. An agent-based approach
Authored by Eric Guerci, Gabriele Cardullo
Date Published: 2019
DOI: 10.1016/j.jebo.2017.12.003
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Abstract
We construct an agent based computational model of the labour market
with heterogeneous workers and firms to study the behaviour of the
Beveridge curve along the business cycle. In this framework, search
frictions arise because filling a vacancy is a costly activity that
takes time, whereas productivity mismatch comes from firms' imperfect
information about the value of the workers before the job interview
takes place. The model offers an interpretation for the outward movement
exhibited by the U.S. Beveridge curve since the last months of 2009.
Sectoral misallocation plays a role. Moreover, when the speed of
recovery from a recession is not uniform across sectors, unemployed
workers are less selective in their application strategy and firms must
spend more time in choosing the best match. Unemployment remains high in
spite of an increase in the number of vacancies. (C) 2018 Elsevier B.V.
All rights reserved.
Tags
Agent-based modelling
Model
Search
Unemployment
Labor-market
Mismatch
Cyclical behavior
Vacancies
Equilibrium unemployment
Beveridge curve