An increase in the pace of technological change can have two profound side effects in the labor market. It can increase the rate and the average duration of unemployment. Because firms may not consider it cost-effective to retrain some types of workers to keep up with change, notably the less-educated and older employees, these workers may be jobless for long periods of time, with some of them ...

In light of nonstationary search theory (Mortensen, 1977; Van den Berg, 1990), this paper estimates the effects of benefit entitlement periods and size of unemployment benefits on unemployment durations and postunemployment earnings in West Germany. For unemployment durations, we apply censored Box–Cox quantile regression, which is robust with respect to the specification of the unobserved erro...

A prominent policy issue of the 1970s and one that seems certain to dominate the early 1980s is the appropriate response to a prevailing high rate of inflation. The view that there is a long-run trade-off between inflation and unemployment, widely accepted at the end of the sixties, is now held by only a small minority of economists. It is still widely believed, however, that there is a short-r...

Tunisia’s unemployment rate has been among the highest in the world for almost two decades. This article claims that such a high rate reflects measurement problems rather than labor market inefficiency. After discussing the reasons why unemployment rates may not be comparable across countries and reviewing the tools that are available to analyze unemployment in a specific country, the article p...

General-equilibrium models for studying the zero lower bound on the nominal interest rate contain implicit theories of unemployment. In some cases, the theory is explicit. When the nominal rate is above the level that clears the current market for output, the excess supply shows up as diminished output, lower employment, and higher unemployment. Quite separately, the Diamond-Mortensen-Pissaride...

This paper accounts for the observed increase in unemployment duration relative to the unemployment rate in the U.S. over the past thirty years, typified by the record low level of short-term unemployment. We show that part of the increase is due to changes in how duration is measured, a consequence of the 1994 Current Population Survey redesign. Another part is due to the passage of the baby b...

In this paper we show how time-varying unemployment benefits can generate equilibrium wage dispersion in an economy in which identical firms post wages and homogeneous risk-averse workers search for acceptable offers. We model a two-tier unemployment benefit system that is similar to real-world unemployment insurance programs. We assume that the unemployed initially receive benefits at rate b. ...

The torpid recovery of the job market in the wake of the 2001 recession has continued to be the focus of much discussion among economists and policy makers as job growth continues to only creep upwards from its low four years after the start of the recovery. Correspondingly, unemployment numbers remained seemingly high for much longer than forecasters had predicted, even as the rest of the econ...