9- The Labour Market Flashcards
When is a job match formed?
When an unemployed worker is hired by a firm with an unfilled vacancy
What is a key characteristic in the functioning of job matching?
Job matching is not perfect so some unemployed workers don’t find jobs and some vacancies remain unfilled
What is the notation to represent the number of unemployed workers?
u
What is the notation to represent the number of vacancies?
v
What is labour market tightness (θ)?
The number of available jobs per unemployed job seeker: v/u
What is the notation for the number of job matches?
h
What is the notation for the rate at which unemployed workers find a job?
f = h/u
What is the average duration of unemployment?
1/f
What is the separations rate or job destruction rate (τ/tau)?
The proportion of workers that leave employment in each period
What is the notation for the rate at which vacancies are filled?
q = h/v
What is the average duration of a vacancy?
1/q
What is the notation for the efficiency of job matching?
m
What is the Inflow rate (I)?
The rate at which workers enter unemployment
What is the Outflow rate (O)?
The rate at which workers leave unemployment
How are the inflow and outflow rate related when the labour market is in equilibrium?
They are equal: I = O
