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Alteration in Skills and Career-Enhancing in a Frictional Labor Market

Author

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  • Yosuke Oda

    (Graduate school of Economics, Osaka university)

Abstract

This article constructs a job-search model in which worker fs ability varies over time; a highability unemployed might lose her skills due to prolonged unemployment whereas a low-ability employed might acquire her skills due to (an implicit) on-the-job training. We numerically show that both pecuniary reward for short-term unemployed and reduction in unemployment benefits leads to lower unemployment rate, however, the former policy does stimulate careerenhancing of long-term unemployed whereas the latter does not. In addition, numerical analysis suggests that mixture of the two policy can lead to higher aggregate welfare than under a sole policy.

Suggested Citation

  • Yosuke Oda, 2008. "Alteration in Skills and Career-Enhancing in a Frictional Labor Market," Discussion Papers in Economics and Business 08-09, Osaka University, Graduate School of Economics.
    • Handle: RePEc:osk:wpaper:0809
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    References listed on IDEAS

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    More about this item

    Keywords

    job-search model; cyclical change in skills; career-enhancing separation;
    All these keywords.

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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