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Stick, Carrot and Skill Acquisition

  • Filges, Trine

    (Danish National Institute of Social Research)

  • Larsen, Birthe

    (Department of Economics, Copenhagen Business School)

This paper examins the macroeconomic effects of youth unemployement programmes in the form of vocational training (YUPs), developing a two sector general equilibrium model featuring matching frictions and worker-firm wage bargaining for skilled workers. Unskilled sector wages are indexed to skilled sector wages. Workers differ with respect to ability, having importance for the young worker`s skill decision. Furthermore, a young worker may be offered vocational training through YUPs. The total number of skilled workers is therefore determined by these two channels and the interaction between them. We focus on the impact of YUPs on skill division, unemployment distribution workers and aggregate unemployment.

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File URL: http://openarchive.cbs.dk/cbsweb/handle/10398/7601
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Paper provided by Copenhagen Business School, Department of Economics in its series Working Papers with number 09-2001.

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Length: 17 pages
Date of creation: 11 Dec 2001
Date of revision:
Handle: RePEc:hhs:cbsnow:2001_009
Contact details of provider: Postal: Department of Economics, Copenhagen Business School, Solbjerg Plads 3 C, 5. sal, DK-2000 Frederiksberg, Denmark
Phone: 38 15 25 75
Fax: 38 15 34 99
Web page: http://www.cbs.dk/departments/econ/
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  1. Filges, Trine & Larsen, Birthe, 2001. "The Impact of Yputh Unemployment Policy," Working Papers 08-2001, Copenhagen Business School, Department of Economics.
  2. Larsen, Birthe, 2001. "Minimum wages, technological progress and loss of skill," European Economic Review, Elsevier, vol. 45(8), pages 1521-1544, August.
  3. Jensen, P. & Nielsen, M.S. & Rosholm, M., 1999. "The Effects of Benefits, Incentives, and Sanctions on Youth Employment," Papers 99-05, Centre for Labour Market and Social Research, Danmark-.
  4. Fredriksson, Peter, 1997. " Economic Incentives and the Demand for Higher Education," Scandinavian Journal of Economics, Wiley Blackwell, vol. 99(1), pages 129-42, March.
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