Nothing Special   »   [go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/red/sed011/978.html
   My bibliography  Save this paper

Structural Unemployment

Author

Listed:
  • Thijs van Rens

    (CREI, Universitat Pompeu Fabra, CEPR and IZA)

  • Benedikt Herz

    (Universitat Pompeu Fabra)

Abstract
There is an ongoing debate on whether the recent surge in unemployment in the US is due to cyclical or structural factors. The distinction is important because the policies required to reduce each type of unemployment are very dierent. We use a novel approach to empirically quantify the extent of structural unemployment and to shed light on its sources. We propose a simple model of a segmented labor market. Within each segment, search frictions generate unemployment. In addition, there is structural unemployment due to heterogeneity across segments. Four different types of adjustment costs give rise to structural unemployment: worker mobility costs, job mobility costs, wage setting frictions, and heterogeneity in matching efficiency. We construct data on job and worker surplus and job and worker finding rates and use them to estimate these adjustment costs and assess the contribution of each to unemployment. We find that, across US states, worker mobility costs are larger than job mobility costs. Across industries, mobility costs are very high for both workers and jobs. We then construct a time series for structural unemployment and its components. This helps us to understand the extent, to which unemployment is driven by structural factors in the current and past recessions.

Suggested Citation

  • Thijs van Rens & Benedikt Herz, 2011. "Structural Unemployment," 2011 Meeting Papers 978, Society for Economic Dynamics.
    • Handle: RePEc:red:sed011:978
    as

    Download full text from publisher

    File URL: https://red-files-public.s3.amazonaws.com/meetpapers/2011/paper_978.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Fernando Alvarez & Robert Shimer, 2011. "Search and Rest Unemployment," Econometrica, Econometric Society, vol. 79(1), pages 75-122, January.
    2. Erica L. Groshen & Simon M. Potter, 2003. "Has structural change contributed to a jobless recovery?," Current Issues in Economics and Finance, Federal Reserve Bank of New York, vol. 9(Aug).
    3. Giorgio Topa & Gianluca Violante & Aysegul Sahin, 2010. "Mismatch in the Labor Market," 2010 Meeting Papers 362, Society for Economic Dynamics.
    4. Robert Shimer, 2007. "Mismatch," American Economic Review, American Economic Association, vol. 97(4), pages 1074-1101, September.
    5. Régis Barnichon & Andrew Figura, 2010. "What drives movements in the unemployment rate? a decomposition of the Beveridge curve," Finance and Economics Discussion Series 2010-48, Board of Governors of the Federal Reserve System (U.S.).
    6. Michael W. L. Elsby & Bart Hobijn & Aysegul Sahin, 2010. "The Labor Market in the Great Recession," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 41(1 (Spring), pages 1-69.
    7. Dale Mortensen & Eva Nagypal, 2007. "More on Unemployment and Vacancy Fluctuations," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 10(3), pages 327-347, July.
    8. Oliver Jean Blanchard & Peter Diamond, 1989. "The Beveridge Curve," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 20(1), pages 1-76.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Michael Christl, 2020. "A Beveridge curve decomposition for Austria: did the liberalisation of the Austrian labour market shift the Beveridge curve?," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 54(1), pages 1-15, December.
    2. Hall, R.E., 2016. "Macroeconomics of Persistent Slumps," Handbook of Macroeconomics, in: J. B. Taylor & Harald Uhlig (ed.), Handbook of Macroeconomics, edition 1, volume 2, chapter 0, pages 2131-2181, Elsevier.
    3. Jinzhu Chen & Prakash Kannan & Prakash Loungani & Bharat Trehan, 2012. "New evidence on cyclical and structural sources of unemployment," Proceedings, Federal Reserve Bank of San Francisco, issue March, pages 1-23.
    4. Carlos Carrillo‐Tudela & Ludo Visschers, 2023. "Unemployment and Endogenous Reallocation Over the Business Cycle," Econometrica, Econometric Society, vol. 91(3), pages 1119-1153, May.
    5. Federico Di Pace & Matthias Hertweck, 2019. "Labor Market Frictions, Monetary Policy, and Durable Goods," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 32, pages 274-304, April.
    6. Francesco Furlanetto & Nicolas Groshenny, 2016. "Mismatch Shocks and Unemployment During the Great Recession," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 31(7), pages 1197-1214, November.
    7. Herrendorf, Berthold & Rogerson, Richard & Valentinyi, Ákos, 2014. "Growth and Structural Transformation," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 6, pages 855-941, Elsevier.
    8. Axtell, Robert L. & Guerrero, Omar A. & López, Eduardo, 2019. "Frictional unemployment on labor flow networks," Journal of Economic Behavior & Organization, Elsevier, vol. 160(C), pages 184-201.
    9. Anna Sabadash, 2013. "ICT-induced Technological Progress and Employment: A Literature Review," JRC Working Papers on Digital Economy 2013-07, Joint Research Centre.
    10. Robert E. Hall & Sam Schulhofer-Wohl, 2018. "Measuring Job-Finding Rates and Matching Efficiency with Heterogeneous Job-Seekers," American Economic Journal: Macroeconomics, American Economic Association, vol. 10(1), pages 1-32, January.
    11. Regis Barnichon & Andrew Figura, 2015. "Labor Market Heterogeneity and the Aggregate Matching Function," American Economic Journal: Macroeconomics, American Economic Association, vol. 7(4), pages 222-249, October.
    12. Steven J. Davis & R. Jason Faberman & John C. Haltiwanger, 2012. "Recruiting Intensity during and after the Great Recession: National and Industry Evidence," American Economic Review, American Economic Association, vol. 102(3), pages 584-588, May.
    13. Sedláček, Petr, 2014. "Match efficiency and firms' hiring standards," Journal of Monetary Economics, Elsevier, vol. 62(C), pages 123-133.
    14. Anna Sabadash, 2013. "ICT-induced Technological Progress and Employment: a Happy Marriage or a Dangerous Liaison? A Literature Review," JRC Research Reports JRC76143, Joint Research Centre.
    15. Bauer, Anja, 2013. "Mismatch unemployment : evidence from Germany 2000-2010," IAB-Discussion Paper 201310, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    16. Carrillo-Tudela, Carlos & Visschers, Ludo, 2014. "Unemployment and Endogenous Reallocation over the Business Cycle," 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon TN 2015-35, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    17. José Ramón García Martínez & Valeri Sorolla, 2013. "Frictional and Non Frictional Unemployment in Models with Matching Frictions," Working Papers. Serie AD 2013-02, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    18. Michal Tvrdoň, 2015. "Decomposition of Unemployment: The Case of the Visegrad group countries," Working Papers 0005, Silesian University, School of Business Administration.
    19. Domenico Ferraro, 2018. "The Asymmetric Cyclical Behavior of the U.S. Labor Market," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 30, pages 145-162, October.
    20. Yuelin Liu, 2014. "How Structural Is Unemployment in the United States?," Discussion Papers 2014-42, School of Economics, The University of New South Wales.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Benedikt Herz & Thijs van Rens, 2020. "Accounting for Mismatch Unemployment," Journal of the European Economic Association, European Economic Association, vol. 18(4), pages 1619-1654.
    2. Yashiv, Eran, 2007. "Labor search and matching in macroeconomics," European Economic Review, Elsevier, vol. 51(8), pages 1859-1895, November.
    3. Jinzhu Chen & Prakash Kannan & Prakash Loungani & Bharat Trehan, 2012. "New evidence on cyclical and structural sources of unemployment," Proceedings, Federal Reserve Bank of San Francisco, issue March, pages 1-23.
    4. Carlos Carrillo‐Tudela & Ludo Visschers, 2023. "Unemployment and Endogenous Reallocation Over the Business Cycle," Econometrica, Econometric Society, vol. 91(3), pages 1119-1153, May.
    5. Francesco Furlanetto & Nicolas Groshenny, 2012. "Matching efficiency and business cycle fluctuations," Working Paper 2012/07, Norges Bank.
    6. Yashiv, Eran, 2006. "U.S. Labor Market Dynamics Revisited," IZA Discussion Papers 2455, Institute of Labor Economics (IZA).
    7. R. Jason Faberman & Andreas I. Mueller & Ayşegül Şahin & Giorgio Topa, 2022. "Job Search Behavior Among the Employed and Non‐Employed," Econometrica, Econometric Society, vol. 90(4), pages 1743-1779, July.
    8. Régis Barnichon & Bart Hobijn & Ayşegül Şahin, 2010. "Which industries are shifting the Beveridge curve?," Working Paper Series 2010-32, Federal Reserve Bank of San Francisco.
    9. Axtell, Robert L. & Guerrero, Omar A. & López, Eduardo, 2019. "Frictional unemployment on labor flow networks," Journal of Economic Behavior & Organization, Elsevier, vol. 160(C), pages 184-201.
    10. Mary C. Daly & Bast Hobijn & Ayşeqül Şahin & Robert G. Valletta, 2012. "Rynki pracy w modelu poszukiwań i dopasowań: czy naturalna stopa bezrobocia rzeczywiście wzrosła?," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 11-12, pages 147-172.
    11. Daly, Mary C. & Hobijn, Bart & Valletta, Robert G., 2011. "The Recent Evolution of the Natural Rate of Unemployment," IZA Discussion Papers 5832, Institute of Labor Economics (IZA).
    12. Domenico Ferraro, 2018. "The Asymmetric Cyclical Behavior of the U.S. Labor Market," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 30, pages 145-162, October.
    13. William T. Dickens & Robert K. Triest, 2012. "Potential effects of the Great Recession on the U.S. labor market," Working Papers 12-9, Federal Reserve Bank of Boston.
    14. Michael Christl, 2020. "A Beveridge curve decomposition for Austria: did the liberalisation of the Austrian labour market shift the Beveridge curve?," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 54(1), pages 1-15, December.
    15. Christl, Michael, 2019. "A beveridge curve decomposition for Austria: What drives the unemployment rate?," VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy 203551, Verein für Socialpolitik / German Economic Association.
    16. Esther Eiling & Raymond Kan & Ali Sharifkhani, 2018. "Sectoral Labor Reallocation and Return Predictability," Working Papers 2018-006, Human Capital and Economic Opportunity Working Group.
    17. Shigeru Fujita, 2011. "Dynamics of worker flows and vacancies: evidence from the sign restriction approach," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 26(1), pages 89-121, January/F.
    18. repec:zbw:rwirep:0005 is not listed on IDEAS
    19. Brown, Alessio & Merkl, Christian & Snower, Dennis, 2015. "An Incentive Theory Of Matching," Macroeconomic Dynamics, Cambridge University Press, vol. 19(3), pages 643-668, April.
    20. Sniekers, F.J.T., 2013. "Endogenous Beveridge cycles and the volatility of unemployment," CeNDEF Working Papers 13-12, Universiteit van Amsterdam, Center for Nonlinear Dynamics in Economics and Finance.
    21. Regis Barnichon & Andrew Figura, 2015. "Labor Market Heterogeneity and the Aggregate Matching Function," American Economic Journal: Macroeconomics, American Economic Association, vol. 7(4), pages 222-249, October.

    More about this item

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:red:sed011:978. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Christian Zimmermann (email available below). General contact details of provider: https://edirc.repec.org/data/sedddea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.