Vacancy Chains
Year: 2025
Type: article
Abstract: Replacement hiring plays a central role in establishment dynamics. US establishments frequently report no net change in their employment, often for years, despite facing substantial gross turnover. We devise a tractable model in which replacement hiring is driven by a novel structure of frictions, combining firm dynamics, on-the-job search, and investments into job creation that are sunk at the point of replacement. A key implication is the emergence of vacancy chains. Quantitatively, the model reconciles the incidence of replacement hiring with large cross-establishment dispersion in labor productivity and largely replicates the volatility and persistence of job creation and unemployment.
Source: Journal of Political Economy
DOI: 10.1086/737234
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W4411369390