Unpredictable labor supply shocks drive fluctuations in job market dynamics.
The article explores how changes in job search and productivity affect the labor market during economic ups and downs. By creating a model that considers individual job choices and market shocks, the researchers found that both factors are crucial for understanding fluctuations in employment, unemployment, and participation rates. Simply put, shifts in job search rates and productivity levels play a significant role in shaping the overall labor market dynamics.