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Abstract for:

Resurrecting the Participation Margin

Monique  Ebell,  June 2008
Paper No' CEPDP0873: | Full paper (pdf)
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Keywords: Unemployment; Business Cycles, Labor Force Participation

JEL Classification: E24; E32; J21; J64

Is hard copy/paper copy available? YES - Paper Copy Still In Print.
This Paper is published under the following series: CEP Discussion Papers
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This paper considers a real business cycle model with search frictions in the labor market and labor supply which is elastic along the participation margin. Previous authors have found that such models generate counterfactually procyclical unemployment and a positively-sloped Beveridge curve. This paper presents a calibrated model which succeeds at generating countercyclical unemployment and a negatively-sloped Beveridge curve despite the presence of a participation margin.