Stefan Eriksson: IFAU - Office of Labour Market Policy Evaluation, Postal: Labour Market Policy Evaluation, P O Box 513, SE-751 20 Uppsala, Sweden
Abstract: This paper investigates the consequences of skill loss as a result of unemployment in an efficiency wage model with turnover costs and on-the-job search. Firms are unable to differentiate wages and therefore prefer to hire employed searchers or unemployed workers who have not lost human capital. It is shown that if some fundamental factor in the economy changes, this will result in a lengthy adjustment process with substantial long run unemployment effects. Moreover, the model is capable of generating persistence but the amount depends on the duration of the shock itself
35 pages, April 27, 2001
Full text files
Questions (including download problems) about the papers in this series should be directed to Ali Ghooloo ()
Report other problems with accessing this service to Sune Karlsson ().
This page generated on 2018-03-18 13:49:10.