Macroeconomics and Monetary Studies Function
Federal Reserve Bank of New York
33 Liberty Street
New York, NY 10045
Institutional Affiliation: Federal Reserve Bank of New York
NBER Working Papers and Publications
|September 2018||Labor Market Search With Imperfect Information and Learning|
with John J. Conlon, Matthew Wiswall, Basit Zafar: w24988
We investigate the role of information frictions in the US labor market using a new nationally representative panel dataset on individuals' labor market expectations and realizations. We find that expectations about future job offers are, on average, highly predictive of actual outcomes. Despite their predictive power, however, deviations of ex post realizations from ex ante expectations are often sizable. The panel aspect of the data allows us to study how individuals update their labor market expectations in response to such shocks. We find a strong response: an individual who receives a job offer one dollar above her expectation subsequently adjusts her expectations upward by $0.47. The updating patterns we document are, on the whole, inconsistent with Bayesian updating. We embed the em...
|January 2018||Statistical Discrimination and Duration Dependence in the Job Finding Rate|
with Gregor Jarosch: w24200
This paper models a frictional labor market where employers endogenously discriminate against the long term unemployed. The estimated model replicates recent experimental evidence which documents that interview invitations for observationally equivalent workers fall sharply as unemployment duration progresses. We use the model to quantitatively assess the consequences of such employer behavior for job finding rates and long term unemployment and find only modest effects given the large decline in callbacks. Interviews lost to duration impact individual job-finding rates solely if they would have led to jobs. We show that such instances are rare when firms discriminate in anticipation of an ultimately unsuccessful application. Discrimination in callbacks is thus largely a response to dynami...
Published: Gregor Jarosch & Laura Pilossoph, 2019. "Statistical Discrimination and Duration Dependence in the Job Finding Rate," The Review of Economic Studies, vol 86(4), pages 1631-1665.