Spanish Unemployment Persistence and the Ladder Effect

Fabrice Collard, Raquel Fonseca (fonseca.raquel@uqam.ca) and Rafael Munoz

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: This paper aims to examine unemployment persistence in Spain by the soûcalled 'ladder' effect. This arises when highly-skilled workers who do not find a job matching their skills accept jobs which previously were occupied by less qualified staff. We develop a dynamic general equilibrium model, in which two types of workers ù characterised by their level of formal education ù coexist on the labour market. Highly educated workers are then assumed to compete with lowûskilled workers, generating a ladder eñect. The model is then calibrated on the Spanish economy. Our results replicate the observed decline in the ratio of high to lowûskilled vacancies, and explains how firms substitute high for lowûskilled employment. The results also suggest that the Spanish ladder effect may reflect increases in the training costs as a result of a biased-shock against low-skilled workers.

Keywords: Matching models; low-skilled unemployment; mismatch (search for similar items in EconPapers)
JEL-codes: E24 J64 (search for similar items in EconPapers)
Date: 2002-07
References: Add references at CitEc
Citations: View citations in EconPapers (8)

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Related works:
Working Paper: Spanish Unemployment Persistence and the Ladder Effect (2003)
Working Paper: Spanish unemployment persistence and the ladder effect (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:cep:cepdps:dp0538

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