Structural Unemployment

Benedikt Herz and Thijs van Rens

No 568, Working Papers from Barcelona School of Economics

Abstract: Structural unemployment is due to mismatch between available jobs and workers. We formalize this concept in a simple model of a segmented labor market with search frictions within segments. Worker mobility, job mobility and wage bargaining costs across segments generate structural unemployment. We estimate the contribution of these costs to fluctuations in US unemployment, operationalizing segments as states or industries. Most structural unemployment is due to wage bargaining costs, which are large but nevertheless contribute little to unemployment fluctuations. Structural unemployment is as cyclical as overall unemployment and no more persistent, both in the current and in previous recessions.

Keywords: Wage rigidities; structural unemployment; mismatch; dispersion labor market conditions; worker mobility; job mobility (search for similar items in EconPapers)
JEL-codes: E24 J61 J62 (search for similar items in EconPapers)
Date: 2015-09
New Economics Papers: this item is included in nep-lab and nep-mac
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Citations: View citations in EconPapers (20)

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Related works:
Working Paper: Structural Unemployment (2011)
Working Paper: Structural unemployment (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:bge:wpaper:568

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