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The Effects of the Loss of Skills on Unemployment Fluctuations

Author

Listed:
  • Julen Esteban-Pretel

    (Faculty of Economics, University of Tokyo)

Abstract

This paper studies the effects of the loss of skills on the persistence of unemployment and other macroeconomic variables. It combines a Real Business Cycle model with a search and matching labor market to explain how the loss of skill of workers and the subsequent decrease in their probability of finding new jobs creates more persistent business cycles. The paper proves that the introduction of this mechanism improves the performance of the model and is able to replicate cross country differences in unemployment and output persistence.

Suggested Citation

  • Julen Esteban-Pretel, 2005. "The Effects of the Loss of Skills on Unemployment Fluctuations," CIRJE F-Series CIRJE-F-371, CIRJE, Faculty of Economics, University of Tokyo.
    • Handle: RePEc:tky:fseres:2005cf371
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    File URL: http://www.cirje.e.u-tokyo.ac.jp/research/dp/2005/2005cf371.pdf
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    References listed on IDEAS

    as
    1. Marcus Hagedorn & Iourii Manovskii, 2008. "The Cyclical Behavior of Equilibrium Unemployment and Vacancies Revisited," American Economic Review, American Economic Association, vol. 98(4), pages 1692-1706, September.
    2. repec:bla:germec:v:7:y:2006:i::p:265-296 is not listed on IDEAS
    3. Hector Sala & José I. Silva, 2005. "The relevance of Post-Match LTC: Why has the Spanish labor market become as volatile as the US one?," Working Papers wpdea0515, Department of Applied Economics at Universitat Autonoma of Barcelona.
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    6. Cole, Harold L & Rogerson, Richard, 1999. "Can the Mortensen-Pissarides Matching Model Match the Business-Cycle Facts?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 40(4), pages 933-959, November.
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    12. Garey Ramey & Wouter J. den Haan & Joel Watson, 2000. "Job Destruction and Propagation of Shocks," American Economic Review, American Economic Association, vol. 90(3), pages 482-498, June.
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    Cited by:

    1. Khalifa, Sherif, 2015. "Learning-by-doing and unemployment dynamics," Economic Modelling, Elsevier, vol. 44(C), pages 180-187.
    2. Julen Esteban-Pretel & Elisa Faraglia, 2005. "Monetary Shocks in a Model with Loss of Skills," 2005 Meeting Papers 328, Society for Economic Dynamics.

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