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Labor Turnover Costs and the Cyclical Behavior of Vacancies and Unemployment

Silva Becerra, Jose I., Toledo, Manuel (2009) Labor Turnover Costs and the Cyclical Behavior of Vacancies and Unemployment. Macroeconomic Dynamics, 13 (S1). pp. 76-96. ISSN 1469-8056. (doi:10.1017/S1365100509080122) (The full text of this publication is not currently available from this repository. You may be able to access a copy if URLs are provided) (KAR id:40240)

The full text of this publication is not currently available from this repository. You may be able to access a copy if URLs are provided. (Contact us about this Publication)
Official URL
http://dx.doi.org/10.1017/S1365100509080122

Abstract

This paper extends the Diamond-Mortensen-Pissarides (DMP) matching model with endogenous job destruction by introducing postmatch labor turnover costs. We consider training and separation costs that create heterogeneity among workers. In particular, there are two types of employed workers: (i) new entrants who need training in order to become fully productive, and (ii) incumbents who are fully productive and whose departure from the firm imposes costs on it. We find that our calibrated model, relative to the standard DMP model, comes closer to the data regarding the volatility of vacancies and unemployment without introducing unrealistic sensitivity to policy changes. Moreover, our extended model nearly reproduces the downward-sloping Beveridge curve, which is unusual when endogenous job destruction exists in this type of model.

Item Type: Article
DOI/Identification number: 10.1017/S1365100509080122
Additional information: number of additional authors: 1;
Uncontrolled keywords: Labor Markets; Search; Matching; Turnover Costs; Business Cycles
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculties > Social Sciences > School of Economics
Depositing User: Stewart Brownrigg
Date Deposited: 07 Mar 2014 00:05 UTC
Last Modified: 29 May 2019 12:21 UTC
Resource URI: https://kar.kent.ac.uk/id/eprint/40240 (The current URI for this page, for reference purposes)
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