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The Rise in Danish Unemployment: Reallocation or Mismatch?

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  • Karsten Albæk

    (Institute of Economics, University of Copenhagen)

  • Henrik Hansen

    (The Royal Veterinary and Agricultural University, Copenhagen)

Abstract

Two key relations in theoretical work on labor market flows are analyzed; the hiring function and the uv-curve. The relations are identified in a cointegrated VAR-model framework. The system comprising unemployment, vacancies and hirings is driven by a stochastic trend in the vacancies, corresponding to the status of vacancies as the driving force in models of labor market flows. The drift in the relations is modeled by smooth transition functions and is identified as increased mismatch problems in the Danish labor market as opposed to increased structural change.

Suggested Citation

  • Karsten Albæk & Henrik Hansen, 1999. "The Rise in Danish Unemployment: Reallocation or Mismatch?," Discussion Papers 99-15, University of Copenhagen. Department of Economics.
  • Handle: RePEc:kud:kuiedp:9915
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    Cited by:

    1. Joanna Tyrowicz & Lucas Velde & Jan Svejnar, 2017. "Effects Of Labor Reallocation On Productivity And Inequality—Insights From Studies On Transition," Journal of Economic Surveys, Wiley Blackwell, vol. 31(3), pages 712-732, July.
    2. Friedrich L. Sell, 2016. "Combining the Beveridge and the Phillips Curve into an Integrative Model: The Modified Output Gap," Review of Economics & Finance, Better Advances Press, Canada, vol. 6, pages 1-12, May.
    3. Jan Svejnar & Joanna Tyrowicz & Lucas van der Velde, 2015. "Productivity and Inequality Effects of Rapid Labor Reallocation – Insights from a Meta-Analysis of Studies on Transition," Working Papers 2015-11, Faculty of Economic Sciences, University of Warsaw.
    4. Aki Kangasharju & Sanna-Mari Hynninen & Jaakko Pehkonen, 2006. "Regional Matching Frictions and Aggregate Unemployment," Discussion Papers 383, Government Institute for Economic Research Finland (VATT).
    5. Saleh Alkafri, 2011. "Transition from High Education to the Labour Market: Unemployment within Graduates from the Gender Prospective In the Palestinian Territory," Working Papers 30, AlmaLaurea Inter-University Consortium.
    6. Heidi Soininen, 2007. "Finnish Evidence of Changes in Labor Market Matching," Finnish Economic Papers, Finnish Economic Association, vol. 20(1), pages 57-71, Spring.

    More about this item

    Keywords

    hiring function; UV-curve; cointegrated VAR-Model; smooth transition functions; mismatch;

    JEL classification:

    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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