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Training, Job Upgrading, Job Creation and Job Destruction

  • António Menezes

    ()

  • José Vieira

    ()

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    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

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    File URL: http://hdl.handle.net/10.1007/s11293-008-9137-7
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    Article provided by International Atlantic Economic Society in its journal Atlantic Economic Journal.

    Volume (Year): 36 (2008)
    Issue (Month): 3 (September)
    Pages: 275-292

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    Handle: RePEc:kap:atlecj:v:36:y:2008:i:3:p:275-292
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    1. Olivier Blanchard & Pedro Portugal, 1998. "What Hides Behind An Unemployment Rate: Comparing Portuguese and Us Unemployment," Working Papers w199803, Banco de Portugal, Economics and Research Department.
    2. Geroski,Paul A. & Gregg,Paul, 1997. "Coping with Recession," Cambridge Books, Cambridge University Press, number 9780521626019, 1.
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    4. Garibaldi, Pietro, 1998. "Job flow dynamics and firing restrictions," European Economic Review, Elsevier, vol. 42(2), pages 245-275, February.
    5. Dale T. Mortensen & Christopher A. Pissarides, 1994. "Job Creation and Job Destruction in the Theory of Unemployment," Review of Economic Studies, Oxford University Press, vol. 61(3), pages 397-415.
    6. Acemoglu, Daron & Pischke, Jörn-Steffen, 1996. "Why do Firms Train? Theory and Evidence," CEPR Discussion Papers 1460, C.E.P.R. Discussion Papers.
    7. Bassanini, Andrea & Booth, Alison L. & Brunello, Giorgio & De Paola, Maria & Leuven, Edwin, 2005. "Workplace Training in Europe," IZA Discussion Papers 1640, Institute for the Study of Labor (IZA).
    8. 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.
    9. 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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    11. 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, June.
    12. Acemoglu, Daron & Shimer, Robert, 2000. "Productivity gains from unemployment insurance," European Economic Review, Elsevier, vol. 44(7), pages 1195-1224, June.
    13. 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.
    14. 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.
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