An Equilibrium Model of Search Unemployment
AbstractThis paper develops a simple general equilibrium model with sequential search in which a non-degenerate wage offer distribution is endogenously determined. We use this model to analyze the comparative statics effects of increases in unemployment compensation on the unemployment rate and aggregate welfare taking into account the induced change in the wage offer distribution. Our results differ significantly from the predictions of the standard "partial-partial" model. For example, one can expect a selective increase in unemployment compensation, made available to those who impute a relatively low value to leisure, to decrease the equilibriumum rate of unemployment.
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Bibliographic InfoArticle provided by University of Chicago Press in its journal Journal of Political Economy.
Volume (Year): 92 (1984)
Issue (Month): 5 (October)
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Web page: http://www.journals.uchicago.edu/JPE/
Other versions of this item:
- E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
- J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
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