Job Market Talk: "Vacant Jobs," Xincheng Qiu, University of Pennsylvania
Xincheng Qiu, University of Pennsylvania
Xincheng Qiu is a PhD Candidate from the University of Pennsylvania. Prior to attended UPenn, Xincheng attended Peking University and received his BA and MA in Economics. His research interests are primarily in Macroeconomics and Labor Economics.
Paper: "Vacant Jobs"
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.