Dynamic perspectives on labor markets and unemployment

Abstract

Labor markets are the arenas where workers exchange their labor power in return for wages, status and other job characteristics: through market exchanges, job matches are formed, and specific workers and employers enter employment relationships with each other (Kalleberg and Sorensen 1979). And while, in comparison to other markets, labor markets often generate stable long-term attachments between workers and employers, there can be little doubt about the fact that constant dynamics and (ex)change are an equally important feature of modem labor markets: against the large majority of stable matches at any point in time, a constant level of frictions and dynamics results from workers switching between jobs and employers, and employers hiring, promoting or dismissing individual workers, but also from employers restructuring larger employment and job structures within individual firms, and from larger-scale changes in the overall structure of labor demand that resonate in changes in employment and business structures in the economy at large.