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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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.
|Digital Object Identifier (DOI):||doi:10.1111/1468-0297.00432|
|Subjects:||H Social Sciences > HD Industries. Land use. Labor|
|Divisions:||University Structure - Pre August 2011 > School of Social Sciences > Economics
|Date Deposited:||21 Dec 2006|
|Last Modified:||06 Aug 2015 02:30|
|RDF:||RDF+N-Triples, RDF+N3, RDF+XML, Browse.|
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