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The Cyclical Behavior Of Unemployment And Vacancies With Loss Of Skills During Unemployment

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  • Ortego-Marti, Victor

Abstract

This paper studies the cyclical fluctuations in unemployment and vacancies in a search and matching model in which workers lose skills during periods of unemployment. Firms' profits fluctuate more because aggregate productivity affects the economy's average human capital. Moreover, wages for workers with lower levels of human capital are closer to the value of nonmarket time, leading to more rigid wages. Fluctuations in the vacancy--unemployment ratio are larger than those in the baseline search and matching model and similar to those we observe in the data.

Suggested Citation

  • Ortego-Marti, Victor, 2017. "The Cyclical Behavior Of Unemployment And Vacancies With Loss Of Skills During Unemployment," Macroeconomic Dynamics, Cambridge University Press, vol. 21(6), pages 1277-1304, September.
    • Handle: RePEc:cup:macdyn:v:21:y:2017:i:06:p:1277-1304_00
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    Cited by:

    1. Lalé, Etienne, 2018. "Loss of skill and labor market fluctuations," Labour Economics, Elsevier, vol. 50(C), pages 20-31.
    2. Lajos Tamás Szabó, 2025. "Correction: The effect of labour tightness on wages at the regional level in Central Europe," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 59(1), pages 1-1, December.
    3. Ortego-Marti, Victor, 2017. "Differences in skill loss during unemployment across industries and occupations," Economics Letters, Elsevier, vol. 161(C), pages 31-33.
    4. Jackson, Paul & Ortego-Marti, Victor, 2024. "Skill loss during unemployment and the scarring effects of the COVID-19 pandemic," Labour Economics, Elsevier, vol. 88(C).

    More about this item

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment

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