We examine the inter-related dynamics of the unemployment flows and stock. Our model allows them to be linked through the standard accounting identity, but also through behavioural relationships. We find that, for the UK, the bulk of the correlation between duration and the unemployment stock...

The existing literature on inequality between private and public sectors focuses on cross-section differences in earnings levels. Forward-looking agents, however, care about income and job mobility too, which we show are substantially different between the two sectors. Using data from the BHPS,...