Job duration and match characteristics over the business cycle

• Main Authors: BAYDUR, Ismail, MUKOYAMA, Toshihiko
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2020
• Subjects: business cycles; match characteristics; job duration; unemployment; job-to-job transitions; Macroeconomics; Work, Economy and Organizations
• Online Access: https://ink.library.smu.edu.sg/soe_research/2365; https://ink.library.smu.edu.sg/context/soe_research/article/3364/viewcontent/1_s2.0_S1094202520300053_main.pdf
• Institution: Singapore Management University

This paper studies the cyclical behavior of job separation and the characteristics of matches between workers and jobs. We estimate a proportional hazard model with competing risks, distinguishing between different types of separations. A higher unemployment rate at the start of an employment relationship increases the probability of job-to-job transitions, whereas its effect on employment-to-unemployment transitions is negative. We then build a simple job ladder model to interpret our empirical results. A model with two-dimensional heterogeneity in match (job) characteristics has the same qualitative features as the data. Once the model is extended to include cyclicality in the offered match characteristics, it can fit the quantitative features of the data.