Labor market frictions shape employment and unemployment during economic cycles.
The article examines how labor markets behave during economic ups and downs. By studying different factors like job availability and worker productivity, the researchers created a model that mimics real-world employment patterns. They found that both external shocks and individual worker circumstances play a role in shaping the job market. The study shows that a combination of labor supply and market frictions can explain why people are employed, unemployed, or not in the workforce at different times.