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A job ladder model with stochastic employment opportunities

Author

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  • Jake Bradley
  • Axel Gottfries
Abstract
We set up a model with on‐the‐job search in which firms infrequently post vacancies for which workers occasionally apply. The model nests the standard job ladder and stock‐flow models as special cases, while remaining analytically tractable and easy to estimate from standard panel data sets. The parameters from a structurally estimated model on US data are significantly different from either the restrictions imposed by a stock‐flow or job ladder model. Imposing these restrictions significantly understates the search option associated with employment and are, unlike our model, inconsistent with recent survey evidence and declining job finding rates and starting wage with duration of unemployment, both of which are present in the data.

Suggested Citation

  • Jake Bradley & Axel Gottfries, 2021. "A job ladder model with stochastic employment opportunities," Quantitative Economics, Econometric Society, vol. 12(4), pages 1399-1430, November.
    • Handle: RePEc:wly:quante:v:12:y:2021:i:4:p:1399-1430
    DOI: 10.3982/QE1394
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    References listed on IDEAS

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    Cited by:

    1. Cynthia L. Doniger, 2022. "These Caps Spilleth Over: Equilibrium Effects of Unemployment Insurance," Finance and Economics Discussion Series 2022-074, Board of Governors of the Federal Reserve System (U.S.).
    2. Cynthia Doniger, 2023. "Wage Dispersion with Heterogeneous Wage Contracts," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 51, pages 138-160, December.
    3. Bradley, Jake, 2022. "Worker-Firm Screening and the Business Cycle," IZA Discussion Papers 15017, Institute of Labor Economics (IZA).

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