Working Paper: CEPR ID: DP439
Authors: Michael Burda; Charles Wyplosz
Abstract: The purpose of this paper is to establish some stylized facts on gross labor market flows - using mostly new data from France, Germany, the United Kingdom and the United States - which any theory of unemployment ought to explain. The regularities on gross labor market flows that we isolate are inconsistent with a large class of theories of labor markets and business cycles. Key results are: flows into and out of unemployment are countercyclical; these flows move tightly together, over both the cycle and the long run; the bulk of exits from unemployment actually represent job findings rather than exits from the labor force; employment inflows and outflows are procyclical.
Keywords: entry and exit from unemployment; business cycles; pro and countercyclical changes in unemployment
JEL Codes: 023; 122813; 824
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| unemployment inflows (J68) | unemployment outflows (J68) |
| unemployment inflows (J68) | stock of unemployment (J64) |
| unemployment outflows (J68) | stock of unemployment (J64) |
| unemployment inflows (J68) | job losses (J63) |
| economic downturns (F44) | unemployment inflows (J68) |
| economic downturns (F44) | unemployment outflows (J68) |
| improving economy (O51) | employment inflows (J68) |
| improving economy (O51) | employment outflows (J63) |
| recession (E32) | job findings from unemployment (J68) |