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Participation, unemployment and wage bargaining in a real business cycle model

Published online by Cambridge University Press:  17 August 2016

François Langot  and
Muriel Pucci
François Langot
Affiliation:
Université du Maine, GAINS and CEPREMAP
Muriel Pucci
Affiliation:
Université de Paris I and MAD
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Summary

The objective of this article is to evaluate quantitative implications of the hypothesis of matching, with endogenous participation, in the framework of a real cycle model. The choice of participation results from a trade off between domestic production and search for a job. Thus, fluctuations of the unemployment summarise the flows in and out of the labour force. Moreover, in this model, unemployment fluctuations are not Pareto optimal as in Andolfatto [1966] and Merz [1995]. Results of the simulations show how it is possible to explain some stylised facts of the American labour market when flows on this market are so clarified.

Résumé

Résumé

L’objectif de cet article est d’évaluer les implications quantitatives de l'hypothäse d’appariement, avec participation endogäne, dans le cadre d’un modäle de cycles réels. Les choix de participation résultent d’un arbitrage entre production domestique et recherche d’un emploi. Ainsi, les fluctuations du chìmage résument les flux Ö l’intérieur et hors de la force de travail. De plus, dans ce modäle, les fluctuations du chìmage ne sont pas Pareto optimales comme dans les travaux de Andolfatto [1966] et Merz [1995]. Les résultats des simulations montrent comment il est possible d’expliquer certains faits stylisés du marché du travail américain lorsque les flux sur ce marché sont ainsi explicités.

Keywords

D58E32J41D58E32J41
Type
Research Article
Information
Recherches Économiques de Louvain/ Louvain Economic Review , Volume 62 , Issue 3-4 , 1996 , pp. 299 - 328
Copyright
Copyright © Université catholique de Louvain, Institut de recherches économiques et sociales 1996 

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Footnotes

(*)

We thank P. Cahuc, X. Fairise, P. Fève, D.S. Hamermesh, P.Y. Hénin, H. Kempf and J.M. Tallon for fruitful comments on the first draft. This paper benefited from discussions with the participants of the workshop Labor Market Dynamics and Aggregate Fluctuations, Paris, 1993, and with the participants of the European Economic Association Congress, Maastricht, 1994. Two anonymous referees have also contributed to this version of the paper.

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