Essays on labour market dynamics

This thesis presents three essays that address two of the most basic features of labour markets: job loss and job finding. Chapter 1 introduces the topic. Chapter 2, the first essay, presents considerable evidence that workers in the UK labour market can foresee job loss and respond by starting to search for new employment. The chapter then builds and estimates a model of the labour market in order to estimate how far in advance and how many workers change their search behaviour prior to job loss; and to study the welfare implications of job loss anticipation, and how the associated welfare gains interact with policy. Chapter 3 seeks to understand why the unemployment rate rises during recessions in the UK and US using the flows based approach. The chapter argues that one will overstate the contribution of layoffs to the rise in unemployment during recessions, if one ignores the large number of workers switching jobs. The final essay, Chapter 4, studies why variations in unemployment rates differ so markedly between genders for eighteen OECD countries, using a similar approach to chapter two. The results indicate that unemployment inflows explain the majority of the dynamics of the gender unemployment gap for all eighteen countries. The chapter also demonstrates that a candidate explanation across all countries for this result is the differing gender composition by sector. The thesis is concluded in Chapter 5.