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Unemployment and Search Externalities in a Model with Heterogeneous Jobs and Workers

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Gautier, Pieter A

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Abstract

This paper presents a matching model with low- and high-skilled workers and simple and complex jobs. I show that the degree to which low-skilled workers are harmed by high-skilled workers who are willing to temporarily accept simple jobs depends on the relative productivity of high- and low-skilled workers on simple jobs and on the quit rate of high-skilled workers. Under certain conditions, low-skilled workers can benefit from job competition with high-skilled workers. Within this framework, some explanations for the high and persistent unemployment rates of lower educated workers in the 1990s are evaluated. Copyright 2002 by The London School of Economics and Political Science

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Publisher Info
Article provided by London School of Economics and Political Science in its journal Economica.

Volume (Year): 69 (2002)
Issue (Month): 273 (February)
Pages: 21-40
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Handle: RePEc:bla:econom:v:69:y:2002:i:273:p:21-40

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  1. Falkinger, Josef & Grossmann, Volker, 2002. "Workplaces in the Primary Economy and Wage Pressure in the Secondary Labor Market," IZA Discussion Papers 523, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  2. Pieter A. Gautier & Coenraad N. Teulings & Aico van Vuuren, 2005. "On-the-Job Search and Sorting," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
    Other versions:
  3. Simon D. Woodcock, 2005. "Heterogeneity and Learning in Labor Markets," Labor and Demography 0511012, EconWPA. [Downloadable!]
  4. Michael Sattinger, . "Overlapping Labour Markets," Discussion Papers 03-06, State University of New York at Albany, Department of Economics. [Downloadable!]
    Other versions:
  5. Decreuse, Bruno & Zylberberg, André, 2006. "Job search with ubiquity and the wage distribution," MPRA Paper 3630, University Library of Munich, Germany, revised May 2007. [Downloadable!]
    Other versions:
  6. Runli Xie, 2008. "Skill Specific Unemployment with Imperfect Substitution of Skills," SFB 649 Discussion Papers SFB649DP2008-024, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany. [Downloadable!]
  7. Frederiksen, Anders & Poulsen, Odile, 2008. "Management Compensation and Firm-Level Income Inequality," IZA Discussion Papers 3676, Institute for the Study of Labor (IZA). [Downloadable!]
  8. Bat COCKX & Muriel DEJEMEPPE, 2002. "Do the Higher Educated Unemployed Crowd out the Lower Educated Ones in a Competition for Jobs ?," Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES) Discussion Paper 2002020, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES). [Downloadable!]
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