This paper develops a partial equilibrium job search model to study the behavioral and welfare implications of an Unemployment Insurance (UI) scheme in which job search requirements are imposed on UI recipients with hyperbolic preferences. We show that, if the search requirements are well...

This paper studies the role of culture in shaping unemployment outcomes. The empirical analysis is based on local comparisons across a language barrier in Switzerland. This Röstigraben separates cultural groups, but neither labor markets nor political jurisdictions. Local contrasts across the...

This paper studies a program that extends the maximum duration of unemployment benefits from 30 weeks to 209 weeks. Interestingly, this program is targeted to individuals aged 50 years or older, living in certain eligible regions in Austria. In the evaluation, I use sharp discontinuities in...

This paper evaluates the effects of policy interventions on sectoral labour markets and the aggregate economy in a business cycle model with search and matching frictions. We extend the canonical model by including capital-skill complementarity in production, labour markets with skilled and...

We investigate the relationship between unemployment and growth in China. We find considerable differences in the nature of this relationship across Chinese regions. We argue that this may reflect the different progress in transition across regions, in line with the Aghion-Blanchard model of...

This paper presents an analysis of labour market dynamics, in particular of flows in the labour market and how they interact and affect the evolution of unemployment rates and participation rates, the two main indicators of labour market performance. Our analysis has two special features. First,...

This paper studies unemployed workers’ decisions to change occupations, and their impact on fluctuations in aggregate unemployment and its underlying duration distribution. We develop an analytically and computationally tractable stochastic equilibrium model with heterogenous labor markets. In...

We study the various consequences of and the incentives for outsourcing. We argue that the wage elasticity of labour demand increases as a function of the share of outsourcing, which is a result consistent with existing empirical research. Furthermore, we show that a production mode with a...

We analyse optimal saving of risk-averse households when labour income stochastically jumps between two states. The generalized Keynes-Ramsey rule includes a precautionary savings term. A phase diagram analysis illustrates consumption and wealth dynamics within and between states. There is an...

In a multi-country general equilibrium economy with mobile capital and rigid-wage unemployment, countries may differ in capital endowments, production technologies and rigid wages. Governments tax capital at the source to maximize national welfare. They account for tax base responses to their...