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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References listed on IDEAS
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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.
- Diamond, Peter A, 1982.
"Aggregate Demand Management in Search Equilibrium,"
Journal of Political Economy,
University of Chicago Press, vol. 90(5), pages 881-894, October.
- Calmfors, L., 1992.
"Lessons from the Macroeconomic Experience of Sweden,"
522, Stockholm - International Economic Studies.
- Calmfors, Lars, 1993. "Lessons from the macroeconomic experience of Sweden," European Journal of Political Economy, Elsevier, vol. 9(1), pages 25-72, March.
- 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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