Fukushima, Yoshihiko () (Dept. of Economics, Stockholm University)
Abstract
The paper presents a theoretical analysis of the macroeconomic effects of active labour market programmes in a dual labour-market framework. The paper uses the Shapiro-Stiglitz efficiency-wage model. Active labour market programmes train unskilled labour and transfer them from a high-unemployment to a low-unemployment sector. Programmes have a direct labour-transfer effect which tends to reduce total unemployment. They also have effects on wages via expectations. The later effects were to a very large extent neglected in earlier discussions of active labour-market policy. The model formally identifies and defines the effects on wages via expectations. The net sign of the latter effects depend on how programmes are targeted. In general, the net effect on unemployment is ambiguous. The model explains the conditions under which active labour market programmes reduce aggregate unemployment.
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Paper provided by Stockholm University, Department of Economics in its series Research Papers in Economics with number
1998:2.
Length: 35 pages Date of creation: Sep 1998 Date of revision: Handle: RePEc:hhs:sunrpe:1998_0002
Contact details of provider: Postal: Department of Economics, Stockholm, S-106 91 Stockholm, Sweden Phone: +46 8 16 20 00 Fax: +46 8 16 14 25 Email: Web page: http://www.ne.su.se/ More information through EDIRC
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References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Layard, Richard & Nickell, Stephen, 1986.
"Unemployment in Britain,"
Economica,
London School of Economics and Political Science, vol. 53(210(S)), pages S121-69, Supplemen.
[Downloadable!] (restricted)
Blanchflower, D. & Oswald, A., 1989.
"The Wage Curve,"
Papers
340, London School of Economics - Centre for Labour Economics.
Other versions:
David G. Blanchflower & Andrew J. Oswald, 1990.
"The Wage Curve,"
NBER Working Papers
3181, National Bureau of Economic Research, Inc.
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