The Cyclical Behavior of Unemployment and Vacancies with Loss of Skills during Unemployment

Victor Ortego-Marti

No 201416, Working Papers from University of California at Riverside, Department of Economics

Abstract: This paper studies the cyclical fluctuations in unemployment and vacancies in a search and matching model in which workers lose skills during periods of unemployment. Firms' profits fluctuate more because aggregate productivity affects the economy's human capital level. Moreover, wages for workers with lower levels of human capital are closer to the value of non-market time, leading to more rigid wages. Fluctuations in the vacancy-unemployment ratio are larger than is the case in the baseline search and matching model. For mid-range values of non-market time the improvement is substantial, and the model accounts for most observed labor market fluctuations.

Keywords: Search and Matching; Unemployment Fluctuations; Unemployment History; Human Capital Depreciation (search for similar items in EconPapers)
JEL-codes: E2 (search for similar items in EconPapers)
Date: 2014-09
New Economics Papers: this item is included in nep-dge, nep-ger, nep-hrm and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://economics.ucr.edu/repec/ucr/wpaper/201416.pdf First version, 2014 (application/pdf)

Related works:
Journal Article: THE CYCLICAL BEHAVIOR OF UNEMPLOYMENT AND VACANCIES WITH LOSS OF SKILLS DURING UNEMPLOYMENT (2017)
Working Paper: The Cyclical Behavior of Unemployment and Vacancies with Loss of Skills during Unemployment (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ucr:wpaper:201416

Access Statistics for this paper

More papers in Working Papers from University of California at Riverside, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Kelvin Mac ().