This paper presents a synoptic interpretation of structural unemployment in Europe. The paper consists of three parts. Part 1 summarises some major stilysed facts of the record and the state of unemployment in Europe. In part 2, these facts are taken as the basis for a theoretical interpretation...

This paper studies the role of labor market institutions in business cycle fluctuations. We develop a DSGE model with search and matching frictions and incorporate a US unemployment insurance experience rating system. Layoff taxes based on experience rating finance the cost of unemployment...

This paper provides some evidence on the existence of the wage curve - the negative relationship between individual wages and the local unemployment rate - within a number of occupations. It exploits the Bank of Italy's Household Survey and draws data from 1977 to 2008. An occupation-level wage...

This paper examines the movements in EU unemployment from two perspectives: (a) the NRU/NAIRU perspective, in which unemployment movements are attributed largely to changes in the long-run equilibrium unemployment rate and (b) the chain-reaction perspective, in which unemployment movements are...

This paper examines the labour market matching process by distinguishing its two component stages: the contact stage, in which job searchers make contact with employers and the selection stage, in which they decide whether to match. We construct a theoretical model explaining two-sided selection...

Following Driscoll and Holden (2004), I model forward-looking workers who consider it unfair if a wage adjustment fails to match past inflation. However, the present paper proposes a much larger effect by using the job finding rate as the measure of workers' opportunities outside the firm rather...

The Walrasian theory of labor market equilibrium predicts that in the absence of any market frictions, workers earn a wage rate equal to their marginal productivity. However, this observation is not supported empirically for various economies. Based on the neoclassical tradition, the ratio of...

This paper contributes to the debate concerning the micro-foundation of matching functions in frictional labor markets. The focus is on a particular matching regime, i.e., the so-called urn-ball process. It is shown that in a two-sector economy, even in the presence of heterogeneous workers, the...

Many labor market models use both idiosyncratic productivity and a vacancy free entry condition. This paper shows that these two features combined generate an equilibrium comovement between matches on the one hand and unemployment and vacancies on the other hand, which is observationally...

Does regional unemployment increase or rather decrease entrepreneurial activity? Although this question has been hotly debated among researchers for decades the answers yielded so far are ambiguous and inconclusive. The paper proposes an innovative approach that takes not only interregional...