Career Paths, Unemployment, and the Efficiency of the Labor Market: Should Youth Employment Be Subsidized?

Frédéric Gavrel, Isabelle Lebon and Therese Rebiere

Journal of Public Economic Theory, 2010, vol. 12, issue 3, 533-560

Abstract: This paper studies the implications of learning‐by‐doing on youth unemployment and market efficiency when workers benefiting from this kind of training experience search (while on the job) for a higher skill job. Firms with low‐skill jobs suffer from a poaching behavior by firms with high‐skill jobs, causing a shortage of low‐skill jobs and excessive youth unemployment. An optimal policy, consisting of taxing the output of high‐skill jobs and subsidizing the output of low‐skill jobs, restores market efficiency and reduces youth unemployment.

Date: 2010
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https://doi.org/10.1111/j.1467-9779.2010.01463.x

Related works:
Working Paper: Career paths, unemployment, and the efficiency of the labor market: should youth employment be subsidized? (2010)
Working Paper: Career Paths, Unemployment and the Efficiency of the Labor Market: Should Youth Employment be Subsidized? (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:bla:jpbect:v:12:y:2010:i:3:p:533-560

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