Standard macroeconomic models underpredict the volatility of unemployment fluctuations. A common solution is to assume … jobs. This form of wage rigidity does not affect job creation and thus cannot explain the unemployment volatility puzzle …

predictions of the model change very little, but the welfare costs of unemployment are much larger because unemployment risk is … distributed unequally across workers. As a result, optimal unemployment insurance may be higher and welfare is lower if hiring is … selective. -- labor market models ; welfare ; optimal unemployment insurance …

We investigate unemployment due to mismatch in the US over the past three decades. We propose an accounting framework … that allows us to estimate the overall amount of mismatch unemployment as well as the contribution of the frictions that … caused the mismatch. Mismatch is quantitatively important for unemployment and the cyclical behavior of mismatch unemployment …