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Search Frictions: Matching Aggregate and Establishment Observations By Russell Cooper, John Haltiwanger,
and Jonathan L. Willis |
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Abstract We estimate a search model to match hours,
employment, vacancies and unemployment at the micro and macro levels. We
establish a set of facts concerning the variability of unemployment and
vacancies in the aggregate and the distribution of net employment growth and
the comovement of hours and employment growth at the establishment level. A
search model with non-convex costs of posting vacancies, establishment-level
profitability shocks and a contracting framework to set hours provides a
structure to understand these observations. The estimated model is able to
capture both the aggregate and establishment-level facts. Keywords: Sticky information, state dependent pricing Back to top RWP home |