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What Does Everything Besides the Unemployment Rate Tell Us About Labor Market Tightness?
Between March 2022 and June 2023, the unemployment rate, the most commonly used gauge of labor market tightness, remained in a narrow range between 3.4% and 3.7%. Yet, over this period, nominal wage growth increased to unusually high levels and then moderated, though it remains at a historically high rate. The disparity between a relatively constant unemployment rate and large movements in nominal wage growth has led to a divide in public discourse, with some seeing low unemployment and strong wage growth as a sufficient sign of the strength of the labor market and others concerned that the ...
Working Paper
Quits, worker recruitment, and firm growth: theory and evidence
The authors use establishment data from the Job Openings and Labor Turnover Survey (JOLTS) to study the micro-level behavior of worker quits and their relation to recruitment and establishment growth. They find that quits decline with establishment growth, playing the most important role at slowly contracting firms. They also find a robust, positive relationship between an establishment's reported hires and vacancies and the incidence of a quit. This relationship occurs despite the finding that quits decline, and hires and vacancies increase, with establishment growth. The authors ...
Is the Unemployment Rate a Good Measure of People Currently Out of Work?
Update, May 15, 2020: Following the release of the latest Current Population Survey estimates and related micro data, we are able to calculate the actual value of our U-Cov rate for April, which was 30.7% (not seasonally adjusted). This was over a 17 percentage point increase from March, significantly higher than the 10 percentage point increase in the official “U3” unemployment rate (to 14.4% in April). A 4.8 million increase in the number of people working part-time for economic reasons, a 4.3 million increase in those on unpaid leave, and a 4.5 million increase in those out of the ...
Working Paper
Job Search, Job Amenities, and the Gender Pay Gap
This paper studies gender gaps in labor-market outcomes, with a focus on job ladder dynamics. We show that women experience substantially lower wage growth conditional on prior wages despite nearly identical job-to-job transition rates for men and women. To reconcile these observations, we document gender differences in the valuation of nonwage job amenities and in job search behavior, and develop a multi-dimensional job-ladder model with endogenous search effort where workers value both wages and amenities. The model allows for gender heterogeneity in separation rates, search effort, the ...
Working Paper
Revisiting the role of home production in life-cycle labor supply
This paper revisits the argument, posed by Rupert, Rogerson, and Wright (2000), that estimates of the intertemporal elasticity of labor supply that do not account for home production are biased downward. The author uses the American Time Use Survey, a richer and more comprehensive data source than those used previously, to replicate their analysis, but he also explores how other factors interact with household and market work hours to affect the elasticity of labor supply. An exact replication of their analysis yields an elasticity of about 0.4, somewhat larger than previously estimated. Once ...
Discussion Paper
How Do People Find Jobs?
Most people find themselves looking for work at some point in their adult lives. But what brings employers and job seekers together? And does searching for a new job while unemployed lead to different outcomes than searching while employed? Little is known about the job search process for unemployed workers. Even less is known about the search process and outcomes for currently employed workers?so?called ?on?the?job? search. This Liberty Street Economics post aims to shed light on these questions and to draw some conclusions for our understanding of labor market dynamics more generally.
Working Paper
Has the Willingness to Work Fallen During the Pandemic?
We examine the effect of the Covid pandemic on willingness to work along both the extensive and intensive margins of labor supply. Special survey questions in the Job Search Supplement of the Survey of Consumer Expectations (SCE) allow us to elicit information about individuals’ desired work hours for the 2013-2021 period. Using these questions, along with workers’ actual labor market participation, we construct a labor market underutilization measure, the Aggregate Hours Gap (AHG), following Faberman et al. (2020). The AHG captures changes in labor market underutilization for the full ...
Potential Jobs Impacted by Covid-19: An Update
This blog post updates our earlier analysis of the potential jobs impacted by Covid-19. The update reflects three adjustments to the original analysis. First, we updated our guesses on the shares of each industry employed and working at still-operating businesses based on the Labor Department’s March Employment Situation report. Second, we use an updated model to estimate the possible June unemployment rates from initial unemployment insurance claims data (the model details are found here. Finally, we use unemployment rate predictions that incorporate the data from the April 2 report on ...
Journal Article
Hiring, job loss, and the severity of recessions
The hiring and firing decisions of individual businesses are one of the drivers behind movements in the unemployment rate during expansions and recessions. Whether a recession is driven by large job losses or weak hiring will greatly affect the composition and consequences of the unemployed and can have important policy implications. The extent to which recessions are times of weak hiring or high job loss depends in large part on the severity of the downturn. A recession is a time when the fraction of businesses that are expanding goes down and the fraction of businesses that are contracting ...
Working Paper
The establishment-level behavior of vacancies and hiring
The authors study vacancies, hires, and vacancy yields (success rate in generating hires) in the Job Openings and Labor Turnover Survey, a large representative sample of U.S. employers. The authors also develop a simple framework that identifies the monthly flow of new vacancies and the job-filling rate for vacant positions, the employer counterpart to the job-finding rate for unemployed workers. The job-filling rate moves counter to employment at the aggregate level but rises steeply with employer growth rates in the cross section. It falls with employer size, rises with the worker turnover ...