Comparative Advantage and Unemployment

Mark Joseph Bils, Yongsung Chang () and Sun-Bin Kim

No 15030, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We model unemployment allowing workers to differ by comparative advantage in market work. Workers with comparative advantage are identified by who works more hours when employed. This enables us to test the model by grouping workers based on their long-term wages and hours from panel data. The model captures the greater cyclicality of employment for workers with low comparative advantage. But the model fails to explain the magnitude of countercyclical separations for high-wage workers or the magnitude of procyclical findings for high-hours workers. As a result, it only captures the cyclicality of the extensive, employment margin for low-wage, low-hours workers.

JEL-codes: E24 E32 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-lab and nep-mac
Date: 2009-06
Note: EFG
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Working Paper: Comparative Advantage and Unemployment (2009)
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