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The Continuum Approach to Unemployment Policy: An Overview

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  • J. Michael Orsza
  • Dennis J. Snower

Abstract

This paper reviews a new approach to the design of unemployment policies. It focuses on polciies that have become an increasingly popular weapon against long-term unempoloyment, namely, policies that subsidize the hiring of the long-term unemployed. Whereas the existing literature usually assumes that workers can be divided into homogeneous groups (e.g., employe vs. unemployed, short- vs. long-term unemployed), the approach here characterizes worker heterogeneity in very general terms -- hire and job loss rates varying along the continuum -- and it examines the influence of this heterogeneity on the formulation of optimal unemployment policies.

Suggested Citation

  • J. Michael Orsza & Dennis J. Snower, 1996. "The Continuum Approach to Unemployment Policy: An Overview," Archive Discussion Papers 9604, Birkbeck, Department of Economics, Mathematics & Statistics.
  • Handle: RePEc:bbk:bbkewp:9604
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