In this paper we highlight certain links between unemployment, savings and growth. Using a standard overlapping generations framework modified to incorporate matching frictions in the labour market and a technology capable of yielding unbounded endogenous growth, we show that the cross-country...

The massive increase in unemployment throughout the OECD since the early 1970s has led governments in many countries to introduce, or to expand, labour market policies such as training schemes, employment subsidies, public works or schemes of counselling or assistance in job search. Such...

The purpose of this paper is twofold. First, it reviews the model of search and matching equilibrium and derives the properties of employment and unemployment equilibrium. Second, it applies the model to the study of employment fluctuations and to the explanation of differences in unemployment...

We explore the effects of taxes and subsidies on job creation, job destruction, employment, and wages in the Mortensen-Pissarides version of the search and matching equilibrium framework. Qualitative analytical results show that wage and employment subsidies increase employment, especially of...

We present evidence from a firm level experiment in which we engineered an exogenous change in managerial compensation from fixed wages to performance pay based on the average productivity of lower-tier workers. Theory suggests that managerial incentives affect both the mean and dispersion of...

We document the establishment and evolution of a cooperative norm among workers using evidence from a natural field experiment on a leading UK farm. Workers are paid according to a relative incentive scheme under which increasing individual effort raises a worker's own pay but imposes a negative...

This paper considers a model in which the unemployed have to incur a cost to maintain their skills. If whether they have done so is not observable, the economy has multiple equilibrium supported by self-fulfilling beliefs on the part of the employers. There is a unique steady state equilibrium...

This paper presents a one-sided incomplete (asymmetric) information bargaining game in a dynamic general equilibrium framework. The model predicts business cycle movements in the economy with persistence mechanism arising from asymmetric information and search. The employment level is...

In this paper we study the contribution of inflows and outflows to the dynamics of unemployment in three European countries, the United Kingdom, France and Spain. All countries are interesting in their own right and in the comparison with each other. Britain’s labour markets were strictly...

Most managers enjoy considerable discretion and protection from possible interventions which enables them to look after their own interests. This is often attributed to the dispersion of shareholders and regulations that deter effective outside interventions. This paper presents a model that has...