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Low-Skilled Unemployment, Capital-Skill Complementarity and Embodied Technical Progress

Moreno-Galbis Eva and Henri Sneessens ()
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Moreno-Galbis Eva: UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)

Authors registered in the RePEc Author Service: Eva Moreno Galbis

No 2004025, Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES)

Abstract: We construct an intertemporal general equilibrium model with two types of jobs and two types of workers. We allow for job competition between high- and low-skilled segment of the labour market and for on-the-job search. Matching processes are represented by matching functions à la Pissarides. Workers search intensities are endogenous. Biased technological change is introduced via embodied technical progress and a capital-skill complementarity. The model is calibrated and simulated to evaluate the impact of various types of shocks. The model reproduces quite well the unemployment rate changes and the relative wage stability observed over the last two decades. It suggests strong interactions between biased technological change, discouragement effects and job competition.

Keywords: Skill mismatch; equilibrium unemployment; ladder effect; macro dynamics (search for similar items in EconPapers)
JEL-codes: E24 J21 J23 (search for similar items in EconPapers)
Date: 2004-09-01
New Economics Papers: this item is included in nep-cmp, nep-lab and nep-mac
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Related works:
Journal Article: Low-skilled unemployment, capital-skill complementarity and embodied technical progress (2007) Downloads
Working Paper: Low-skilled unemployment, capital-skill complementarity and embodied technical progress (2007) Downloads
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