Heterogeneity and Cyclical Unemployment

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

No 15166, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We model worker heterogeneity in the rents from being employed in a Diamond-Mortensen-Pissarides model of matching and unemployment. We show that heterogeneity, reflecting differences in match quality and worker assets, reduces the extent of fluctuations in separations and unemployment. We find that the model faces a trade-off--it cannot produce both realistic dispersion in wage growth across workers and realistic cyclical fluctuations in unemployment.

JEL-codes: E2 E32 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dge, nep-lab and nep-mac
Date: Written
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Related works:
Working Paper: Heterogeneity and Cyclical Unemployment (2008)
Working Paper: Heterogeneity and Cyclical Unemployment (2008)
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