The paper explains how a country can fall into a 'low-skill, bad-job trap', in which workers acquire insufficient training and firms provide insufficient skilled vacancies. In particular, the paper argues that in countries where a large proportion of the workforce is unskilled, firms have little...

This paper considers an equilibrium model of unemployment in a labour market where all vacancies are advertised in a newspaper. Unemployment occurs in occupations that are short on vacancies. New vacancies are created by entrepreneurial search and investment, so it may take some time before an...