Understanding European unemployment with matching and search-island models

• 成果类型: Article
• 署名作者: Ljungqvist, Lars; Sargent, Thomas J.
• 署名单位: Stockholm School of Economics; New York University
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2007.09.001
• 发表日期: 2007
• 页码: 2139-2179
• 关键词: search; matching; unemployment insurance; employment protection; turbulence

摘要

To understand European and American unemployment during the last 60 years, we use a search-island model and four matching models with workers who have heterogeneous skills and entitlements to government benefits. When there is higher turbulence, in the sense of worse skill transition probabilities for workers who suffer involuntary layoffs, high government mandated unemployment insurance (UI) and employment protection (EP) in Europe increase unemployment rates and durations. But when there is lower turbulence, high European EP suppresses unemployment rates despite high European UI. Four matching models differ in how they assign unemployed workers to matching functions. That affects how strongly unemployment responds to increases in turbulence. Heterogeneity among unemployed workers highlights the central role of adverse labor market externalities in matching models and reveals that the cost of posting vacancies is the lynchpin of a matching model. (c) 2007 Elsevier B.V. All rights reserved.