Abstract
Firms hire workers from different pools. Some firms hire more unemployed workers than others, making their demand for labor more important for unemployment. I differentiate jobs based on their hiring pool and estimate their wage cyclicality. The key finding is that wages in jobs hiring from unemployment are half as cyclical as wages in other jobs, for both incumbent workers and new hires. To measure the effects of this on unemployment volatility, I develop a labor search model with partial separation of search and heterogeneous wage rigidity and show that accounting for this heterogeneity increases the volatility of unemployment by 14%-34%.
Type
