Career paths, unemployment, and the efficiency of the labor market: should youth employment be subsidized?

Frédéric Gavrel, Isabelle Lebon and Therese Rebiere

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Abstract: This paper studies the implications of learning-by-doing on youth unemployment and market efficiency when workers benefiting from this kind of training experience search (while on the job) for a higher skill job. Firms with low-skill jobs suffer from a poaching behavior by firms with high-skill jobs, causing a shortage of low-skill jobs and excessive youth unemployment. An optimal policy, consisting of taxing the output of high-skill jobs and subsidizing the output of low-skill jobs, restores market efficiency and reduces youth unemployment.

Keywords: labor market; youth employment; career paths; unemployment (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (5)

Published in Journal of Public Economic Theory, 2010, 12 (3), pp.533-560. ⟨10.1111/j.1467-9779.2010.01463.x⟩

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Related works:
Journal Article: Career Paths, Unemployment, and the Efficiency of the Labor Market: Should Youth Employment Be Subsidized? (2010)
Working Paper: Career Paths, Unemployment and the Efficiency of the Labor Market: Should Youth Employment be Subsidized? (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00545220

DOI: 10.1111/j.1467-9779.2010.01463.x

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