Spanish Unemployment Persistence and the Ladder Effect
AbstractThis paper aims to examine to what extent a "ladder" e.ect may contribute to explain changes in unemployment in Spain. The "ladder" e.ect arises when highly-skilled workers who do not find a job that matches their skills, accept jobs that were previously occupied by less qualified staff. We develop a dynamic general equilibrium model. The model is then calibrated for the Spanish economy. Our results replicate the observed decline in the ratio of high to low-skilled vacancies, and explain how firms substitute high for low-skilled employment. These results also suggest that in the Spanish case, ladder e.ect can be better explained by increases in training costs interpreted as a biased-shock against low-skilled workers.
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Bibliographic InfoPaper provided by Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy in its series CSEF Working Papers with number 106.
Date of creation: 01 Oct 2003
Date of revision:
Matching models; low-skilled unemployment; mismatch;
Other versions of this item:
- Fabrice Collard & Raquel Fonseca & Rafael Munoz, 2002. "Spanish Unemployment Persistence and the Ladder Effect," CEP Discussion Papers dp0538, Centre for Economic Performance, LSE.
- E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
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