Work

The Cyclicality of Separation and Job Finding Rates*

Year: 2009

Type: article

Abstract: This article uses CPS gross flow data to analyze the business cycle dynamics of separation and job finding rates and quantify their contributions to overall unemployment variability. Cyclical changes in the separation rate are negatively correlated with changes in productivity and move contemporaneously with them, whereas the job finding rate is positively correlated with and tends to lag productivity. Contemporaneous fluctuations in the separation rate explain between 40 and 50% of fluctuations in unemployment, depending on how the data are detrended. This figure becomes larger when dynamic interactions between the separation and job finding rates are considered.

Source: International Economic Review

DOI: 10.1111/j.1468-2354.2009.00535.x

Authors: Shigeru Fujita, Garey Ramey

Institutions: University of California San Diego, Federal Reserve Bank of Philadelphia

Language: English

Topic: Labor market dynamics and wage inequality

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: green

OpenAlex ID: W3121274485