Stick, Carrot and Skill Acquisition

Trine Filges and Birthe Larsen
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Trine Filges: Danish National Institute of Social Research, Postal: Centre for Research in Social Integration and Marginalization, The Danish National Institute of Social Research, Herluf Trolles Gade 11, DK-1052 Copenhagen K

No 09-2001, Working Papers from Copenhagen Business School, Department of Economics

Abstract: This paper examins the macroeconomic effects of youth unemployement programmes in the form of vocational training (YUPs), developing a two sector general equilibrium model featuring matching frictions and worker-firm wage bargaining for skilled workers. Unskilled sector wages are indexed to skilled sector wages. Workers differ with respect to ability, having importance for the young worker`s skill decision. Furthermore, a young worker may be offered vocational training through YUPs. The total number of skilled workers is therefore determined by these two channels and the interaction between them. We focus on the impact of YUPs on skill division, unemployment distribution workers and aggregate unemployment.

Keywords: Skill acquisition; Search; Unemployment (search for similar items in EconPapers)
JEL-codes: J18 J38 J68 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2001-12-11
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Citations: View citations in EconPapers (2)

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Journal Article: Stick, Carrot and Skill Acquisition* (2005)
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