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.
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|Date of creation:||1992|
|Date of revision:|
|Publication status:||Published in European Economic Review, 1996, 40, pp. 1501-1519|
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- Layard, R. & Nickell, S., 1991.
"Unemployment in the OECD Countries,"
Economics Series Working Papers
99130, University of Oxford, Department of Economics.
- Bean, Charles R, 1994.
"European Unemployment: A Survey,"
Journal of Economic Literature,
American Economic Association, vol. 32(2), pages 573-619, June.
- Saint-Paul, Gilles, 1992.
"Are the Unemployed Unemployable?,"
CEPR Discussion Papers
689, C.E.P.R. Discussion Papers.
- P. Diamond, 1980.
"Aggregate Demand Management in Search Equilibrium,"
268, Massachusetts Institute of Technology (MIT), Department of Economics.
- Calmfors, Lars, 1993.
"Lessons from the macroeconomic experience of Sweden,"
European Journal of Political Economy,
Elsevier, vol. 9(1), pages 25-72, March.
- Calmfors, L., 1992. "Lessons from the Macroeconomic Experience of Sweden," Papers 522, Stockholm - International Economic Studies.
- Christopher A. Pissarides, 1992. "Loss of Skill During Unemployment and the Persistence of Employment Shocks," The Quarterly Journal of Economics, Oxford University Press, vol. 107(4), pages 1371-1391.
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