This paper provides a critique of the ?unemployment invariance hypothesis,? according to which the behavior of the labor market ensures that the long-run unemployment rate is independent of the size of the capital stock, productivity, and the labor force. Using Solow growth and endogenous growth...

This paper reviews the literature on two-sided atomeless assignment models of workers to tasks. Using simple parametric examples, the fundamental differences between the comparative advantage and the scale of operations models are illustrated. Holding the distributions of abilities and tasks and...

This paper characterizes the optimal redistributive taxation when individuals are heterogeneous in two exogenous dimensions: their skills and their values of non-market activities. Search-matching frictions on the labor markets create unemployment. Wages, labor demand and participation are...

We consider a model of on-the-job search where firms offer long-term wage contracts to workers of different ability. Firms do not observe worker ability upon hiring but learn it gradually over time. With sufficiently strong information frictions, low-wage firms offer separating contracts and...

In the last decades, the OECD labor markets faced important labor supply changes with the arrival of women and the cohorts of the baby-boom. Using a survey where workers declare their true employment experience, this paper argues that these supply trends imply more inexperienced workers. It then...

We analyse an equilibrium labour market with on-the-job search and experience effects (where workers learn-by-doing). The analysis yields a standard Mincer wage equation with worker fixed effects and endogenously determined firm fixed effects. It shows that learning-by-doing increases...

This paper analyzes the role of the period length in a search model of the labor market and argues that it has profound implications for the market equilibrium. In the model, job offers and job destruction shocks arrive according to a Poisson process in continuous time, but institutional factors...

In recent decades most developed countries have experienced an increase in income inequality. In this paper, we use an equilibrium search framework to shed additional light on what is causing an income distribution to change. The major benefit of the model is that it can accommodate shocks to...

Different empirical studies suggest that the structure of employment in the U.S. and Great Britain tends to polarise into good and bad jobs. We provide updated evidence that polarisation also occurred in Germany since the mid-1980s until 2008. Using representative panel data, we show that this...

This study attempts to explain why the transition to a market economy is skill-biased. It shows unequivocal evidence on increased skill wage premium and supply of skills in transition economies. It examines whether similar skill?favoring shifts in the Russian and U.S. economies are driven by the...