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Are the unemployed unemployable?

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  • Saint-Paul, Gilles

Abstract

This paper develops a matching model of the labor market under wage rigidity when hiring decisions are irreversible. There are two types of workers, the skilled and the unskilled. The model is used to analyze whether technological advances may have increased unemployment. It is shown that it is likely to be so if they are associated with an increase in the productivity and/or the supply of skilled workers relative to unskilled workers. These effects are stronger when hiring decisions are more irreversible.

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File URL: http://www.sciencedirect.com/science/article/B6V64-3VWT1C8-7/2/ed179fd68c6103f6a3fdc842dfc6a948
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Bibliographic Info

Article provided by Elsevier in its journal European Economic Review.

Volume (Year): 40 (1996)
Issue (Month): 7 (August)
Pages: 1501-1519

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Handle: RePEc:eee:eecrev:v:40:y:1996:i:7:p:1501-1519

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  1. Saint-Paul, Gilles, 1992. "Are the Unemployed Unemployable?," CEPR Discussion Papers 689, C.E.P.R. Discussion Papers.
  2. Bean, Charles R, 1994. "European Unemployment: A Survey," Journal of Economic Literature, American Economic Association, vol. 32(2), pages 573-619, June.
  3. Richard Layard & Stephen Nickell, 1992. "Unemployment in the OECD Countries," CEP Discussion Papers dp0081, Centre for Economic Performance, LSE.
  4. P. Diamond, 1980. "Aggregate Demand Management in Search Equilibrium," Working papers 268, Massachusetts Institute of Technology (MIT), Department of Economics.
  5. Calmfors, Lars, 1993. "Lessons from the macroeconomic experience of Sweden," European Journal of Political Economy, Elsevier, vol. 9(1), pages 25-72, March.
  6. Pissarides, Christopher A, 1992. "Loss of Skill during Unemployment and the Persistence of Employment Shocks," The Quarterly Journal of Economics, MIT Press, vol. 107(4), pages 1371-91, November.
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