Economics, Econometrics and Finance
4 years ago

Good news boosts job market, lowers unemployment, and raises wages!

RePEc: Research Papers in Economics
News and labour market dynamics in the data and in matching models
Francesco Zanetti, Konstantinos Theodoridis

Paper Summary

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The article explores how news about productivity affects the job market. After a positive news shock, unemployment decreases, wages and job finding rates go up. This shows that news plays a big role in labor market changes, but not as much in real economic activity. The study uses a model to match these findings. Job destruction rates and wage rigidities are crucial for how the job market responds to news shocks.