Working Papers

The Life-cycle Profile of Worker Flows in Europe

with Jonathan Créchet (University of Ottawa) and Etienne Lalé (UQAM)

(March 2024)

Abstract: We document how worker flows between employment, unemployment, and out of the labor force, vary by age and gender for a large panel of European countries. We develop and calibrate an extended Diamond-Mortensen-Pissarides model that captures all the salient features of these data. The model assigns a major role to the production technology in driving differences in aggregate employment, while, in contrast to standard analyses, labor-market policies play only a secondary role. Search intensity and a labor-force participation decision are key for propagating the effects of technology across age and gender groups, and for explaining the variation in aggregate employment.