Are the Unemployed Unemployable?
This paper develops a matching model of the labor 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 analyze whether technological advances may have increased unemployment. It is shown that it is likely to be so if they are associated with an increase in the productivity and/or the supply of skilled workers relative to unskilled workers. These effects are stronger when hiring decisions are more irreversible.
|Date of creation:||01 Jun 1994|
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- Richard Layard & Stephen Nickell, 1992.
"Unemployment in the OECD Countries,"
CEP Discussion Papers
dp0081, Centre for Economic Performance, LSE.
- Gilles Saint-Paul, 1994.
"Are the Unemployed Unemployable?,"
IMF Working Papers
94/64, International Monetary Fund.
- 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.
- C Bean, 1992.
"European Unemployment: A Survey,"
CEP Discussion Papers
dp0071, Centre for Economic Performance, LSE.
- 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.
- P. Diamond, 1980.
"Aggregate Demand Management in Search Equilibrium,"
268, Massachusetts Institute of Technology (MIT), Department of Economics.
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