Declining search frictions, unemployment and self-employment Piotr Denderski and Florian Sniekers
By: Denderski, Piotr
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Contributor(s): Sniekers, Florian.
Material type: 
ArticleSubject(s): TRABAJADORES AUTONOMOS | DESEMPLEO | MODELOS ECONOMETRICOS
In:
The Economic Journal v. 134, n. 659, April 2024, p. 1100-1145 Summary: In most OECD countries, unemployment rates show no trend, which is puzzling if advancements in information and communication technologies decrease labour-market frictions. We show, both analytically and quantitatively, that accounting for the secular decline in self-employment rates solves the puzzle. While declining labour-market frictions can theoretically explain these trends, we provide contradictory causal evidence that the roll-out of broadband internet has increased self-employment and decreased unemployment rates. We reconcile these observations with a new model featuring frictions in both labour and goods markets. We explain falling self-employment and non-trending unemployment quantitatively by labour-market frictions declining relatively more than goods-market frictions.
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| OP 282/2024/658-1 Unemployment and Development | OP 282/2024/658-2 Unintended Consequences of Central Bank Lending in Financial Crises | OP 282/2024/659 The Economic Journal | OP 282/2024/659-1 Declining search frictions, unemployment and self-employment | OP 282/2024/659-2 Immigration, female labour supply and local cultural norms | OP 282/2024/660 The Economic Journal | OP 282/2024/661 The Economic Journal |
Resumen
Bibliografía.
In most OECD countries, unemployment rates show no trend, which is puzzling if advancements in information and communication technologies decrease labour-market frictions. We show, both analytically and quantitatively, that accounting for the secular decline in self-employment rates solves the puzzle. While declining labour-market frictions can theoretically explain these trends, we provide contradictory causal evidence that the roll-out of broadband internet has increased self-employment and decreased unemployment rates. We reconcile these observations with a new model featuring frictions in both labour and goods markets. We explain falling self-employment and non-trending unemployment quantitatively by labour-market frictions declining relatively more than goods-market frictions.
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