Economics Webinar (2023-02)
Topic: Vacant Jobs
Speaker: Xincheng Qiu, University of Pennsylvania
Time: Tuesday, January 10, 10:00-11:30 a.m. Beijing time
Location: Zoom Online Conference Room
Abstract
Canonical theories of frictional labor markets conceptualize separations as job destruction and vacancies as job creation. Yet, workers exiting the labor force hence vacating their positions, dubbed the vacating channel, is an empirically important source of both employment outflows and vacancy inflows. It is absent in standard models that treat vacancies as recruiting efforts, while I document facts on vacancy dynamics that point to an alternative view of vacancies as part of the job life cycle. I develop a model that incorporates the vacating channel and quantitatively replicates properties of labor market flows. It brings novel insights into the business cycle theory of unemployment: Procyclical employment-to-nonparticipation quits contribute to vacancy fluctuations due to the vacating channel, accounting for about one-third of unemployment fluctuations. Understanding the source of vacancies also has important policy implications: While creating a new job as an investment activity is responsive to the interest rate, reposting a vacated position is not. This sheds new light on the possibility of a “soft landing”—raising interest rates without causing high unemployment—during the “Great Resignation,” a period of elevated vacating.
Biography
Xincheng Qiu is a Ph.D. candidate in the Department of Economics at the University of Pennsylvania. His research focuses on the macroeconomics of labor markets. He has been named the Dean's Scholar at the University of Pennsylvania in recognition of his outstanding scholarly achievement.
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