Data and Code for: Learning on the Job and the Cost of Business Cycles

Principal Investigator(s):  View help for Principal Investigator(s) Karl Walentin, Sveriges Riksbank; Andreas Westermark, Sveriges Riksbank

Version:  View help for Version V1

Name File Type Size Last Modified
  output_files 03/19/2021 05:28:AM
B_interpol.mexa64 application/x-sharedlib 21.5 KB 03/19/2021 01:27:AM
B_interpol_current.m text/x-matlab 762 bytes 03/19/2021 01:27:AM
J_ergodic_computer.m text/x-matlab 1.7 KB 03/19/2021 01:27:AM
P_B_plus_computer.m text/x-matlab 2.8 KB 03/19/2021 01:27:AM
P_B_plus_ergodic_computer.m text/x-matlab 1.2 KB 03/19/2021 01:27:AM
P_and_B_interpol.m text/x-matlab 3.8 KB 03/19/2021 01:27:AM
P_interpol.mexa64 application/x-sharedlib 21.5 KB 03/19/2021 01:27:AM
S_B_and_ergodic_solver_dynamic.m text/x-matlab 21.7 KB 03/19/2021 01:27:AM
S_B_declaring_some_vars.m text/x-matlab 2.7 KB 03/19/2021 01:27:AM
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Project Description

Summary:  View help for Summary We show that business cycles reduce welfare through a decrease in the average level of employment in a labor market search model with learning on-the-job and skill loss during unemployment. Empirically, unemployment and the job finding rate are negatively correlated. Since new jobs are the product of these two from the employment transition equation, business cycles imply fewer news jobs. Learning on-the-job implies that the resulting decrease in employment reduces aggregate human capital. This reduces incentives to post vacancies, further decreasing employment and human capital. We quantify this mechanism and find large output and welfare costs of business cycles.

Scope of Project

Subject Terms:  View help for Subject Terms Labor market
JEL Classification:  View help for JEL Classification
      E32 Business Fluctuations; Cycles
      J64 Unemployment: Models, Duration, Incidence, and Job Search
Geographic Coverage:  View help for Geographic Coverage U.S.
Universe:  View help for Universe Adult humans
Data Type(s):  View help for Data Type(s) aggregate data
Collection Notes:  View help for Collection Notes All data sets used are publicly available with the exception of job finding rate data provided by Shigeru Fujita. This dataset is is generated using Current Population Survey data, which are publicly available.


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Published Versions

V1 [2022-09-30]

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