Unemployment vs. mismatch of talents: reconsidering unemployment benefits
Unemployment vs. mismatch of talents: reconsidering unemployment benefits
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.
266-291
Marimon, Ramon
36f3bac5-05a2-411e-b345-79580d8a3b90
Zilibotti, Fabrizio
4e5e129e-cb11-4b09-8ba4-ce400e638712
1999
Marimon, Ramon
36f3bac5-05a2-411e-b345-79580d8a3b90
Zilibotti, Fabrizio
4e5e129e-cb11-4b09-8ba4-ce400e638712
Marimon, Ramon and Zilibotti, Fabrizio
(1999)
Unemployment vs. mismatch of talents: reconsidering unemployment benefits.
Economic Journal, 109 (455), .
(doi:10.1111/1468-0297.00432).
Abstract
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.
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Published date: 1999
Organisations:
Economics
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Local EPrints ID: 33083
URI: http://eprints.soton.ac.uk/id/eprint/33083
ISSN: 0013-0133
PURE UUID: 5a7dd1bb-45e1-446d-a67c-b4f99ceaa326
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Date deposited: 21 Dec 2006
Last modified: 15 Mar 2024 07:41
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Author:
Ramon Marimon
Author:
Fabrizio Zilibotti
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