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Alteration in Skills and Career-Enhancing in a Frictional Labor Market

Author

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  • Yosuke Oda

    () (Graduate school of Economics, Osaka university)

Abstract

This article constructs a job-search model in which worker fs ability varies over time; a highability unemployed might lose her skills due to prolonged unemployment whereas a low-ability employed might acquire her skills due to (an implicit) on-the-job training. We numerically show that both pecuniary reward for short-term unemployed and reduction in unemployment benefits leads to lower unemployment rate, however, the former policy does stimulate careerenhancing of long-term unemployed whereas the latter does not. In addition, numerical analysis suggests that mixture of the two policy can lead to higher aggregate welfare than under a sole policy.

Suggested Citation

  • Yosuke Oda, 2008. "Alteration in Skills and Career-Enhancing in a Frictional Labor Market," Discussion Papers in Economics and Business 08-09, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).
  • Handle: RePEc:osk:wpaper:0809
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    References listed on IDEAS

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    1. Meyer, Bruce D, 1990. "Unemployment Insurance and Unemployment Spells," Econometrica, Econometric Society, vol. 58(4), pages 757-782, July.
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    5. Davidson, Carl & Woodbury, Stephen A, 1993. "The Displacement Effect of Reemployment Bonus Programs," Journal of Labor Economics, University of Chicago Press, vol. 11(4), pages 575-605, October.
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    7. Paul T. Decker & Christopher J. L'Leary, 1995. "Evaluating Pooled Evidence from the Reemployment Bonus Experiments," Journal of Human Resources, University of Wisconsin Press, vol. 30(3), pages 534-550.
    8. Christopher J. O'Leary & Robert G. Spiegelman & Kenneth J. Kline, 1995. "Do bonus offers shorten unemployment insurance spells? results from the washington experiment," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 14(2), pages 245-269.
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    13. Anderson, Patricia M, 1992. "Time-Varying Effects of Recall Expectation, a Reemployment Bonus, and Job Counseling on Unemployment Durations," Journal of Labor Economics, University of Chicago Press, vol. 10(1), pages 99-115, January.
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    More about this item

    Keywords

    job-search model; cyclical change in skills; career-enhancing separation;

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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