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Training, Job Upgrading, Job Creation and Job Destruction

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  • António Menezes

    ()

  • José Vieira

    ()

Abstract

We extend the Mortensen and Pissarides ( 1999a , b ) model to feature an endogenous upgrading or training rate, to gain a novel, general equilibrium, approach to training and labour market policy to gain a distinct model from the traditional partial equilibrium approach (e.g. Acemoglu and Pischke 1998 ). Among other results, we show training subsidies decrease equilibrium unemployment incidence, duration and level and less generous unemployment benefits increase the occurance of training. We also show the high elasticity of job destruction to aggregate conditions causes the frequency of training to be procyclical. A calibrated version of our model rationalizes cross-country differences in labour and training equilibrium outcomes. Copyright International Atlantic Economic Society 2008

Suggested Citation

  • António Menezes & José Vieira, 2008. "Training, Job Upgrading, Job Creation and Job Destruction," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 36(3), pages 275-292, September.
  • Handle: RePEc:kap:atlecj:v:36:y:2008:i:3:p:275-292
    DOI: 10.1007/s11293-008-9137-7
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    References listed on IDEAS

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    1. Daron Acemoglu & Jörn-Steffen Pischke, 1998. "Why Do Firms Train? Theory and Evidence," The Quarterly Journal of Economics, Oxford University Press, vol. 113(1), pages 79-119.
    2. Mortensen, Dale & Pissarides, Christopher, 2011. "Job Creation and Job Destruction in the Theory of Unemployment," Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 1, pages 1-19.
    3. Mortensen, Dale T. & Pissarides, Christopher A., 1999. "New developments in models of search in the labor market," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 39, pages 2567-2627 Elsevier.
    4. repec:wop:calsdi:97-23 is not listed on IDEAS
    5. Steven J. Davis & John C. Haltiwanger & Scott Schuh, 1998. "Job Creation and Destruction," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262540932, January.
    6. Aghion, Philippe & Saint-Paul, Gilles, 1998. "VIRTUES OF BAD TIMES Interaction Between Productivity Growth and Economic Fluctuations," Macroeconomic Dynamics, Cambridge University Press, vol. 2(03), pages 322-344, September.
    7. Olivier Blanchard & Pedro Portugal, 1998. "What Hides Behind an Umemployment Rate: Comparing Portuguese and U.S. Unemployment," NBER Working Papers 6636, National Bureau of Economic Research, Inc.
    8. Garibaldi, Pietro, 1998. "Job flow dynamics and firing restrictions," European Economic Review, Elsevier, vol. 42(2), pages 245-275, February.
    9. Acemoglu, Daron & Shimer, Robert, 2000. "Productivity gains from unemployment insurance," European Economic Review, Elsevier, vol. 44(7), pages 1195-1224, June.
    10. Garey Ramey & Wouter J. den Haan & Joel Watson, 2000. "Job Destruction and Propagation of Shocks," American Economic Review, American Economic Association, vol. 90(3), pages 482-498, June.
    11. den Haan, Wouter J. & Ramey, Garey & Watson, Joel, 2000. "Job destruction and the experiences of displaced workers," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 52(1), pages 87-128, June.
    12. Geroski,Paul A. & Gregg,Paul, 1997. "Coping with Recession," Cambridge Books, Cambridge University Press, number 9780521622769.
    13. Simon Burgess, 1994. "The Reallocation of Employment and the Role of Employment Protection Legislation," CEP Discussion Papers dp0193, Centre for Economic Performance, LSE.
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    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Training; Matching models; Job creation; Job destruction; I00; J50; J08; J24; J64;

    JEL classification:

    • I00 - Health, Education, and Welfare - - General - - - General
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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