Economics at your fingertips  

Ranking, Unemployment Duration, and Wages

Olivier Blanchard () and Peter Diamond ()

Review of Economic Studies, 1994, vol. 61, issue 3, 417-434

Abstract: The paper examines the effects of the composition of unemployment on wage determination. It explores the implication of one central assumption: when firms receive multiple acceptable applications, they hire the worker who has been unemployed for the least amount of time. This assumption ("ranking") is contrasted with the assumption of random hiring ("no-ranking"). By embodying this assumption in a model of the labour market with job creation/destruction and matching, the joint behaviour of unemployment, the distribution of unemployment durations, and wages are characterized. The implication that the re-employment prospects of employed workers, were they to become unemployed, are better than those of the currently unemployed appears to have been an important feature of European unemployment experience in the 1980's.

Date: 1994
References: Add references at CitEc
Citations: View citations in EconPapers (256) Track citations by RSS feed

Downloads: (external link) (application/pdf)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Ranking, Unemployment Duration, and Wages (1990) Downloads
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:

Access Statistics for this article

Review of Economic Studies is currently edited by Andrea Prat, Bruno Biais, Kjetil Storesletten and Enrique Sentana

More articles in Review of Economic Studies from Oxford University Press
Bibliographic data for series maintained by Oxford University Press ().

Page updated 2019-04-12
Handle: RePEc:oup:restud:v:61:y:1994:i:3:p:417-434.