By assuming Cobb-Douglas production technology, many well-known imperfectly competitive macroeconomic models of the labour market (e.g. Layard, Nickell and Jackman, 1991) imply that equilibrium unemployment is independent of the capital stock. This paper introduces a new notion of capacity into...

This paper develops a test for monotonicity of nonparametric regression models under endogeneity, which in its generality is novel in the literature.  The test statistic, which is built upon a second order U-process, introduces 'correction terms' based on control functions that purge the...

This paper estimates a New Keynesian model to investigate to what extent labour market reforms undertaken by the Thatcher government in the late 1930s and the introduction of a constant inflation target in 1992 might have changed the UK economic outlook if they had been introduced in the early...

Although it is a common theoretical assumption that the chances to find a job fall with time in unmeployment, this is not systematically confirmed by empirical evidence, and there is no evidence for developing countries.  We develop a farmework that allows us to test the four major explanations...

We construct an equilibrium random matching model of the labour market, with endogenous market participation and a general matching technology that allows for market size effects: the job-finding rate for workers and the incentives for participation change with the level of unemployment. In...

Most econometric schemes to allow for heterogeneity in micro behaviour have two drawbacks: they do not fit the data and they rule out interesting economic models.  In this paper we consider the time homogeneous first order Markov (HFOM) model that allows for maximal heterogeneity.  That is,...

We study the role of preferences in the process of unemployment benefit determination. Perhaps surprisingly, survey evidence for the UK suggests that both the employed and unemployed wish to see a more generous level of unemployment benefits.

I analyze empirically the effects of both urban and industrial agglomeration on men`s and women`s search behavior and on the efficiency of matching. The analysis is based on the Italian Labor Force Survey micro-data, which covers 520 randomly drawn Local Labor Market Areas (66 per cent of the...

We present a simple model where unemployment benefits are determined in an economy in which there is endogenous delay in finding a job so that workers desire insurance against the possibility of unemployment.

The instability of the Beveridge curve in Britain since the mid-50s has been interpreted as revealing a deterioration of labour market effectiveness in matching vacancies to unemployed job-seekers. This paper attemps to repeat the stability analysis of the matching technology, having relaxed...