Unemployment vs. mismatch of talents: reconsidering unemployment benefits

Marimon, Ramon and Zilibotti, Fabrizio (1999) Unemployment vs. mismatch of talents: reconsidering unemployment benefits. Economic Journal, 109, (455), 266-291. (doi:10.1111/1468-0297.00432).


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Original Publication URL: http://dx.doi.org/10.1111/1468-0297.00432


We develop an equilibrium search-matching model with risk-neutral agents and two-sided ex-ante heterogeneity. Unemployment insurance has the standard effect of reducing employment, but also helps workers to get a suitable job. We show, through calibrations, how the mere difference on unemployment insurance, when countries experience a common skilled-biased technological shock, may result in differences in unemployment, productivity growth and wage inequality. These results are consistent with the contrasting performance of the labour market in Europe and the United States in the last twenty-five years. The model is used to address some political economy issues.

Item Type: Article
Digital Object Identifier (DOI): doi:10.1111/1468-0297.00432
ISSNs: 0013-0133 (print)
Related URLs:
Subjects: H Social Sciences > HD Industries. Land use. Labor
Divisions : University Structure - Pre August 2011 > School of Social Sciences > Economics
ePrint ID: 33083
Accepted Date and Publication Date:
Date Deposited: 21 Dec 2006
Last Modified: 06 Aug 2015 02:30
URI: http://eprints.soton.ac.uk/id/eprint/33083

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