2010 Fiscal Year Final Research Report
Search Frictions, Employment Fluctuations and Labor Market Policy
| Project/Area Number |
21730197
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| Research Category |
Grant-in-Aid for Young Scientists (B)
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| Allocation Type | Single-year Grants |
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| Research Field |
Applied economics
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| Research Institution | Kanto Gakuen University |
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Principal Investigator |
TAWARA Norikazu Kanto Gakuen University, 経済学部, 講師 (10517618)
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| Project Period (FY) |
2009 – 2010
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| Keywords | 労働市場 / サーチ / 景気循環 / 雇用 / 失業 / インセンティブ |
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| Research Abstract |
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.
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