In dynamic wage bargaining models it is usually assumed that individual unemployment benefits are a fraction of the average wage level. In most countries, however, unemployment benefits are instead tied to the previous level of individually earned wages. We show how the analysis has to be modified if this fact is taken into account and compare our findings for the wage-setting curve with outcom...

In models recently published by several influential macroeconomic theorists, rigidity in the real wages that firms pay newly hired workers plays a crucial role in generating realistically large cyclical fluctuations in unemployment. There is remarkably little evidence, however, on whether employers’ hiring wages really are invariant to business cycle conditions. We review the small empirical li...

Should unemployment benefits be paid indefinitely at a fixed rate or should it decline (or increase) over a worker’s unemployment spell? We examine these issues using an equilibrium model of search unemployment. The model features worker-firm bargaining over wages, free entry of new jobs, and endogenous search effort among the unemployed. The main result is that an optimal insurance program imp...

I study the cyclical behavior of an equilibrium search model with endogenous job creation and destruction, with focus on the model’s failure to match the observed cyclical volatility of unemployment. Job creation in the model is influenced by wages in new matches. I summarize microeconometric evidence on wages in new matches and show that the key model elasticities are consistent with the evide...

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...

ABSTRAK Di berbagai negara berkembang seperti Indonesia masih menghadapi masalah terkait pertumbuhan ekonomi atau pengangguran. Penelitian ini mempunyai tujuan memahami pengaruh penduduk, upah dan inflasi terhadap tingkat pengangguran terbuka di Sulawesi Selatan. merupakan jenis penelitian kuantitatif dengan mengaplikasikan sumber data sekunder. Variabel terikatnya ialah terbuka, variabel bebas...

1045 We have all visited several stores to check prices and/or to find the right item or the right size. Similarly, it can take time and effort for a worker to find a suitable job with suitable pay, and for employers to receive and evaluate applications for job openings. Search theory explores the workings of markets once facts such as these are incorporated into the analysis. Adequate analysis...

This paper presents a model in which a partially anticipated technology shock results, in the short run, in lower investment and higher unemployment. Because of the expectation of future lower proÞts, the market value of existing Þrms –and the wages they pay– decreases before the new (better) technology becomes available. When the new technology arrives, the market value of new Þrms rises, aver...