Training, Job Upgrading, Job Creation and Job Destruction

António Menezes and José Vieira

Atlantic Economic Journal, 2008, vol. 36, issue 3, 275-292

Abstract: We extend the Mortensen and Pissarides ( 1999a , b ) model to feature an endogenous upgrading or training rate, to gain a novel, general equilibrium, approach to training and labour market policy to gain a distinct model from the traditional partial equilibrium approach (e.g. Acemoglu and Pischke 1998 ). Among other results, we show training subsidies decrease equilibrium unemployment incidence, duration and level and less generous unemployment benefits increase the occurance of training. We also show the high elasticity of job destruction to aggregate conditions causes the frequency of training to be procyclical. A calibrated version of our model rationalizes cross-country differences in labour and training equilibrium outcomes. Copyright International Atlantic Economic Society 2008

Keywords: Training; Matching models; Job creation; Job destruction; I00; J50; J08; J24; J64 (search for similar items in EconPapers)
Date: 2008
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DOI: 10.1007/s11293-008-9137-7

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