Events at CERGE-EI

Thursday, 14 March, 2019 | 13:00 | Macro Research Seminar

Charles Gottlieb, Ph.D. (University of St. Gallen) “Information Frictions in Labor Markets: Cross Country Evidence from Employment Durations”

Charles Gottlieb, Ph.D.

University of St. Gallen, Switzerland


Authors: Charles Gottlieb, Jan Grobovšek, and Markus Poschke

Abstract: This paper builds a database of individual labor market outcomes for 31 countries to measure how labor market turnover varies with income across countries. We show that average employment duration is increasing with aggregate income: labor market turnover is higher and job stability lower in low income countries. We analyze this stylized fact through the lens of an experience good model of labor market turnover to understand to what extent imperfect information about employee-employer match quality, i.e. informational frictions, explains the cross-country variation in the distribution of employment durations.