TY  - JOUR
AU  - Krusell,Per
AU  - Mukoyama,Toshihiko
AU  - Rogerson,Richard
AU  - Sahin,Aysegul
TI  - A Three State Model of Worker Flows in General Equilibrium
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 15251
PY  - 2009
Y2  - August 2009
UR  - http://www.nber.org/papers/w15251
L1  - http://www.nber.org/papers/w15251.pdf
N1  - Author contact info:
Per Krusell
Institute for International Economic Studies
Stockholm University
106 91 STOCKHOLM
SWEDEN
E-Mail: per.krusell@iies.su.se

Toshihiko Mukoyama
Department of Economics
University of Virginia
P.O. Box 400182
Charlottesville VA 22904
E-Mail: tm5hs@virginia.edu

Richard Rogerson
Woodrow Wilson School of
  Public and International Affairs
323 Bendheim Hall
Princeton University
Princeton, NJ 08544
Tel: 609-258-4839
Fax: 609-258-5349
E-Mail: rdr@princeton.edu

Aysegul Sahin
Federal Reserve Bank of New York
Research & Statistics Group
33 Liberty Street
New York, NY  10045
Tel: 212-720-5145
E-Mail: Aysegul.Sahin@ny.frb.org
AB  - We develop a simple model featuring search frictions and a nondegenerate labor supply decision along the extensive margin. The model is a standard version of the neoclassical growth model with indivisible labor with idiosyncratic shocks and frictions characterized by employment loss and employment opportunity arrival shocks. We argue that it is able to account for the key features of observed labor market flows for reasonable parameter values. Persistent idiosyncratic productivity shocks play a key role in allowing the model to match the persistence of the employment and out of the labor force states found in individual labor market histories.
ER  -