The 2008-2009 crisis created large dislocations in the U.S. labor market: some sectors, locations, and occupations were more affected than others. As a result, researchers have been looking at the possibility of structural changes in labor market functioning, which may have created mismatches between available labor and employment opportunities; thus raising equilibrium levels of unemployment. ...

This paper explores how interviews a¤ect the matching process when worker productivity is private information. Wages are determined by a single round of strategic bargaining after the worker is interviewed. The implications of this hiring process for the e¢ ciency of matching and the incidence and severity of statistical discrimination are considered. The better are …rms at identifying producti...

We study the incidence of pollution taxes and their impact on unemployment in an analytical general equilibrium efficiency wage model. find closed-form solutions for effect a tax unemployment, factor prices, output we identify isolate different channels through which these effects arise. An arising from specification depends form workers' effort function. Numerical simulations further illustrat...

It is not easy to summarize Ned Phelps’s monumental contribution to economics. A first impression is likely to be of a vast array of original concepts and models: the “natural rate of unemployment” and the expectations-augmented Phillips curve (1967, 1968, 1971), the “island” parable of search unemployment (1968, 1969, 1970), “incentive/efficiency wages” (1968), optimal inflation targeting over...

Caballero and Hammour present a fresh view of Eurosclerosis, especially of chronic high unemployment. In the earlier standard view, chronic unemployment results from real wages that are fixed at levels that preclude full employment. In addition, generous unemployment compensation, unlimited in duration, is paid to keep the unemployed happy. Wage rigidity is central to the story-if employers cou...

An increase in the share of youth in the working age population of one state or region relative to the rest of the United States causes a sharp reduction in that state’s relative unemployment rate and a modest increase in its labor force participation rate. This is inconsistent with many theories of the labor market, but can be easily explained by a model of frictional unemployment with on-the-...

Redundancy payments for collective dismissals are incorporated into a Shapiro-Stiglitz model of efficiency wages. It is shown that a fixed payment will lower wages, leave employment and welfare unaffected if there are no wage-dependent taxes, no additional firing costs and if unemployment benefits are not altered by redundancy payments. If payroll taxes exceed firing costs and unemployment bene...

Interactions between Private and Public Sector Wages We examine the interactions between public and private sector wages per employee in OECD countries. The growth of public sector wages and of public sector employment positively affects the growth of private sector wages. Moreover, total factor productivity, the unemployment rate and the degree of urbanisation are also important determinants o...