Are the Unemployed Unemployable?
This paper develops a matching model of the labour market under wage rigidity when hiring decisions are irreversible. There are two types of workers, the skilled and the unskilled. The model is used to analyse whether technological advances may have increased unemployment, and shows that this is likely to occur if technological change is associated with an increase in the productivity and/or the supply of skilled relative to unskilled workers. These effects are stronger when hiring decisions are more irreversible.
|Date of creation:||Aug 1992|
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- Richard Layard & Stephen Nickell, 1992.
"Unemployment in the OECD Countries,"
CEP Discussion Papers
dp0081, Centre for Economic Performance, LSE.
- Saint-Paul, G., 1992.
"Are the Unemployed Unemployable,"
DELTA Working Papers
92-04, DELTA (Ecole normale supérieure).
- Calmfors, Lars, 1993. "Lessons from the macroeconomic experience of Sweden," European Journal of Political Economy, Elsevier, vol. 9(1), pages 25-72, March.
- C Bean, 1992.
"European Unemployment: A Survey,"
CEP Discussion Papers
dp0071, Centre for Economic Performance, LSE.
- Pissarides, Christopher A, 1992. "Loss of Skill during Unemployment and the Persistence of Employment Shocks," The Quarterly Journal of Economics, MIT Press, vol. 107(4), pages 1371-91, November.
- Diamond, Peter A, 1982.
"Aggregate Demand Management in Search Equilibrium,"
Journal of Political Economy,
University of Chicago Press, vol. 90(5), pages 881-94, October.
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