Productivity and Job FloWS Heterogeneity oF neW HireS and continuing JobS in tHe buSineSS cycle

@inproceedings{Kilponen2009ProductivityAJ,
  title={Productivity and Job FloWS Heterogeneity oF neW HireS and continuing JobS in tHe buSineSS cycle},
  author={Juha Kilponen and Juuso Vanhla},
  year={2009}
}
This paper focuses on productivity dynamics of a firm-worker match as a potential explanation for the ‘unemployment volatility puzzle’. We let new matches and continuing jobs differ in terms of productivity level and sensitivity to aggregate productivity shocks. As a result, new matches have a higher destruction rate and lower, but more volatile, wages than old matches, as new hires receive technology associated with the latest vintage. In our model, an aggregate productivity shock generates a… CONTINUE READING
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