This paper combines a search model and signaling game to analyze the interrelationship between labor market outcome and educational choices as well as relevant policy implications, featuring endogenous educational requirement for job application. It explains more than 60% of the unemployment rate difference between college and high school graduates. It predicts that higher unemployment benefit ...

This paper studies the role of labor market institutions on unemployment and on the cyclical properties of job flows. We construct an intertemporal general equilibrium model with search unemployment and endogenous job turnover, and examine the consequences of introducing an unemployment benefit, a firing cost and a downward wage rigidity. The model is able to reproduce the main cyclical propert...

During the Great Recession, U.S. unemployment benefits were extended by up to 73 weeks. Theory predicts that extensions increase unemployment by discouraging job search, a partial equilibrium effect. Using data from the large job board CareerBuilder.com, I find that a 10% increase in benefit duration decreased state‐level job applications by 1%, but had no robust effect on job va...

A Note on Unhappiness and Unemployment Duration Although it is now widely-accepted that unemployment is associated with sharply lower levels of individual well-being, relatively little is known about how this effect depends on unemployment duration. Data from three large-scale European panels is used to shed light on this issue; these data allow us to distinguish habituation to unemployment fro...

This paper studies the contribution of in‡ow and out‡ow rates to the unemployment dynamics in the long-run. I …nd that in the U.S., both in‡ow and out‡ow rates contribute signi…cantly to variation in the long-run trend of the unemployment rate. In‡ow and out‡ow rates account for roughly similar proportions of overall unemployment variability in the long-run. Keywords: Unemployment dynamics; Job...

This paper shows that in the UK, increases in unemployment in a recession are driven by rises in the separation rate. A new decomposition of unemployment dynamics is devised that does not require unemployment to be in steady state at all times. This is important because low UK transition rates – one quarter the size of the US –imply substantial deviation of unemployment from steady state near c...

Unemployment Insurance, Wage Dynamics and Inequality over the Life Cycle We investigate the relationship between life cycle wages and individual membership of unemployment insurance schemes in Denmark. We separate permanent from transitory wages and characterise them using membership of unemployment insurance funds. We find that unemployment insurance is associated with lower wage growth hetero...

This paper uses panel and retrospective life history data from an important new data source the British Household Panel Survey to establish some stylised facts about the unemployment experiences of men. In particular we investigate the proportion of the sample who suffer from repeated unemployment spells, the origin and destination states of unemployment spells, some reasons for entering unempl...

This paper presents a tractable dynamic general equilibrium model that can explain cross-country empirical regularities in geographical mobility, unemployment and labor market institutions. Rational agents vote over unemployment insurance (UI), taking the dynamic distortionary effects of insurance on the performance of the labor market into consideration. Agents with higher cost of moving, i.e....