On-the-Job Search Over the Business Cycle

23 Pages Posted: 16 Oct 2007

See all articles by Giuseppe Tattara

Giuseppe Tattara

Ca Foscari University of Venice

Marco Valentini

Ca Foscari University of Venice

Date Written: September 2007

Abstract

On-the-Job Search is one of the most common and efficient ways to look for a new job: most of the time workers move directly from one employment position to another (E-to-E) without an intervening spell of unemployment. E-to-E transitions are a relevant component of total labour flows and have a definite cyclical pattern.

This paper computes E-to-E worker flows through the development of a vacancy chain model. An iterative procedure is used to compute the successive reallocation runs, beginning from an autonomous vacancy and then to reconstruct the complete E-to-E transition process. The procedure is implemented and applied to a large micro-panel based on a highly industrialized Italian region from 1982 to 1996.

E-to-E transitions are an increasingly large portion of worker flows in the labour market. They are clearly cyclic and the number of transitions increases over time as the labour market becomes tighter. These are the flows that explain labour market dynamics in upswings and recessions. Search models that look only at flows between employment, unemployment and outside of the labour force underestimate labour mobility and its cyclical pattern.

Keywords: Job Flows, Search and Matching, Job to Job Mobility, Worker Flows, Business Cycle, Propagation

JEL Classification: E24, E32, J63

Suggested Citation

Tattara, Giuseppe and Valentini, Marco, On-the-Job Search Over the Business Cycle (September 2007). University Ca' Foscari of Venice, Dept. of Economics Research Paper No. 015, Available at SSRN: https://ssrn.com/abstract=1020004 or http://dx.doi.org/10.2139/ssrn.1020004

Giuseppe Tattara (Contact Author)

Ca Foscari University of Venice ( email )

Dorsoduro 3246
Venice, Veneto 30123
Italy

Marco Valentini

Ca Foscari University of Venice ( email )

Dorsoduro 3246
Venice, Veneto 30123
Italy

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