Research Project
Grant-in-Aid for Young Scientists (B)
We first estimate the job finding and employment exit probabilities in Japanese labor markets using the methods developed by Robert Shimer. It is found that the volatility of those estimated job finding probabilities cannot be explained by the standard search model of unemployment with shocks to worker productivity and employment exit rates. We then develop a new theory of wage value rigidity based on two-sided incentive problems between a worker and firm. It is found that a variant of search models of unemployment with such a new mechanism can generate large fluctuations of unemployment as observed in data of Japanese and the U.S. labor markets.
All 2011 2010 2009 Other
All Journal Article (1 results) Presentation (9 results) Remarks (2 results)
World Bank Policy Research Working Paper 5254
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