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학술대회자료

Heterogeneity and Cyclical Unemployment

Heterogeneity and Cyclical Unemployment

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We model worker heterogeneity in the rents from being employed in a DiamondMortensen-Pissarides model of matching and unemployment. We show that heterogeneity, reflecting differences in match quality and worker assets, reduces the extent of fluctuations in separations and unemployment. We find that the model faces a tradeoff–it cannot produce both realistic dispersion in wages across workers and realistic cyclical fluctuations in unemployment.

1. Introduction

2. Model

3. Model Calibration

4. Steady-state Statistics and the Distribution of Match Rents

5. Business cycle predictions

6. Conclusions

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