We study the e¤ects of additional distortions or shocks, such as a fair-wage constraint and/or the possibility of o¤shoring unskilled jobs, in a two-factor general equilibrium model of unemployment with search frictions. While the direct point of impact of such shocks is on unskilled workers, we also …nd interesting indirect spillover e¤ects on skilled workers. A binding fair-wage constraint in...

This paper studies effects of unemployment and labour market programmes on real wages in the Czech and Slovak Republics using district panel data for the period 1992-1998. Clear evidence of a “wage curve” exists in both countries. The estimated unemployment elasticity of pay is, however, higher in the Slovak Republic, than in the Czech Republic. The wage subsidy and the public works programme e...

Using quarterly macro data and annual state panel data, we examine various explanations of the low rate of price inflation, strong real wage growth, and low rate of unemployment in the U.S. economy during the late 1990s. Many of these explanations imply shifts in the coefficients of price and wage Phillips curves. We find, however, that once one accounts for the univariate trends in the unemplo...

The Relationship between Unemployment and Risk-Aversion In this paper we use a direct measure of individual risk-aversion to examine the relationship between risk-aversion and unemployment. The traditional search model predicts that more risk-averse individuals have lower reservation wages and thus are less likely to be observed in unemployment. Our findings, however, do not support this predic...

Scarring Effects of Remaining Unemployed for Long-Term Unemployed School-Leavers This study investigates whether and to what extent further unemployment experience for youths who are already long-term unemployed imposes a penalty on subsequent labor market outcomes. We propose a flexible method for analyzing the effect on wages aside of transitions from unemployment and employment within a mult...

The Dungey and Pitchford (DP) paper and the Debelle and Vickery (DV) paper are important contributions to the macroeconomic analysis of unemployment in Australia. Both papers focus on the question of what macroeconomic factors would reduce unemployment in Australia. Both papers use a rigorous theoretical framework as a basis for developing empirical relationships between unemployment, economic ...

Wage and Employment Determination in Volatile Times: Sweden 1913-1939 The paper studies wage and employment determination in the Swedish business sector from the mid-1910s to the late 1930s. This period includes the boom and bust cycle of the early 1920s as well as the Great Depression of the early 1930s. The events of the early 1920s are particularly intriguing, involving inflation running at ...

It is shown that when wages are determined through collective bargaining, there is a non-monotonic relationship between the cost of o¤shoring and unemployment. Starting from a high cost of o¤shoring, a decrease in the cost of o¤shoring reduces unemployment …rst and then increases it. The non-monotonicity of unemployment in the cost of o¤shoring does not obtain if wages are determined by individ...

In the context of a standard equilibrium matching framework, this paper considers how a duration dependent unemployment insurance (UI) system affects the dynamics of unemployment and wages in an economy subject to stochastic job-destruction shocks. It establishes that re-entitlement e¤ects induced by a …nite duration UI program generate intertemporal transfers from …rms that hire in future boom...