TY  - JOUR
AU  - Elsby,Michael W. L.
AU  - Michaels,Ryan
TI  - Marginal Jobs, Heterogeneous Firms, & Unemployment Flows
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 13777
PY  - 2008
Y2  - February 2008
UR  - http://www.nber.org/papers/w13777
L1  - http://www.nber.org/papers/w13777.pdf
N1  - Author contact info:
Michael W. Elsby
University of Edinburgh
School of Economics
31 Buccleuch Place
Edinburgh
EH8 9JT
United Kingdom
Tel: 011 44 131 650 8361
Fax: 011 44 131 650 4514
E-Mail: Mike.Elsby@ed.ac.uk

Ryan Michaels
Department of Economics
University of Michigan
250 Lorch Hall
Ann Arbor MI 48103
Tel: 734/476-9543
E-Mail: rmikes@umich.edu
AB  - This paper introduces a notion of fir m size into a search and matching model with endogenous job destruction. The outcome is a rich, yet analytically tractable framework that can be used to analyze a broad set of features of both the cross section and the dynamics of the aggregate labor market. In a set of quantitative applications we show that the model can provide a coherent account of a) the salient features of the distributions of employer size, and employment growth across establishments; b) the amplitude and propagation of cyclical fluctuations in flows between employment and unemployment; c) the negative comovement of unemployment and vacancies in the form of the Beveridge curve; and d) the dynamics of the distribution of employer size over the business cycle.
ER  -