Item

Declining search frictions, unemployment and self-employment

Denderski,Piotr
; 
Sniekers,Florian
Abstract
In most OECD countries, unemployment rates show no trend, which is puzzling if advancements in information and communication technologies decrease labour-market frictions. We show, both analytically and quantitatively, that accounting for the secular decline in self-employment rates solves the puzzle. While declining labour-market frictions can theoretically explain these trends, we provide contradictory causal evidence that the roll-out of broadband internet has increased self-employment and decreased unemployment rates. We reconcile these observations with a new model featuring frictions in both labour and goods markets. We explain falling self-employment and non-trending unemployment quantitatively by labour-market frictions declining relatively more than goods-market frictions.
Description
Publisher Copyright: © The Author(s) 2023.
Date
2024-04
Journal Title
Journal ISSN
Volume Title
Publisher
Collections
Tilburg University Research Output Collection
Show all metadata
Research Projects
Organizational Units
Journal Issue
Keywords
Self-employment, unemployment, goods markets, labour markets, search frictions, Internet, matching efficiency, E24 - Employment ; Unemployment ; Wages ; Intergenerational Income Distribution ; Aggregate Human Capital ; Aggregate Labor Productivity, J64 - Unemployment: Models, Duration, Incidence, and Job Search, O33 - Technological Change: Choices and Consequences ; Diffusion Processes, SDG 8 - Decent Work and Economic Growth, SDG 9 - Industry, Innovation, and Infrastructure
Citation
Denderski, P & Sniekers, F 2024, 'Declining search frictions, unemployment and self-employment', Economic Journal, vol. 134, no. 659, pp. 1100-1145. https://doi.org/10.1093/ej/uead093
URI
https://hdl.handle.net/20.500.14602/79979
License
info:eu-repo/semantics/openAccess
Embedded videos