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Skill Flows: A Theory of Human Capital and Unemployment

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  • Ross Doppelt

    (Pennsylvania State University)

Abstract

I present a theoretical macroeconomic model that investigates the link between long-run growth and labor-market dynamics. Workers accumulate human capital on the job, while suffering human capital depreciation during unemployment. On the aggregate level, high unemployment hinders skill formation, creating a drag on growth. The model features endogenous growth, stochastic regime shifts, and a time-varying distribution of wages. Nevertheless, much of the model's value comes from the fact that it admits a sharp analytical characterization of the forces at work. I solve for a competitive equilibrium and derive conditions under which it will be efficient. (Copyright: Elsevier)

Suggested Citation

  • Ross Doppelt, 2019. "Skill Flows: A Theory of Human Capital and Unemployment," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 31, pages 84-122, January.
  • Handle: RePEc:red:issued:17-219
    DOI: 10.1016/j.red.2018.12.004
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    Cited by:

    1. Konstantinos Angelopoulos & Wei Jiang & James Malley, 2015. "Fiscal multipliers in a two-sector search and matching model," Working Papers 2015_03, Business School - Economics, University of Glasgow.
    2. Konstantinos Angelopoulos & Wei Jiang & Jim Malley, 2015. "Fiscal Multipliers in a Two-Sector Search and Matching Model," CESifo Working Paper Series 5197, CESifo.
    3. Konstantinos Angelopoulos & Wei Jiang & James Malley, 2017. "Targeted fiscal policy to increase employment and wages of unskilled workers," Studies in Economics 1704, School of Economics, University of Kent.

    More about this item

    Keywords

    Search theory; Endogenous growth; Unemployment; Human capital;

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • 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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