This paper offers an alternative theory for the increase in unemployment and wage inequality experienced in the United … change increases skilled wages, reduces unskilled wages and increases the unemployment rate of both skilled and unskilled … implication which distinguishes this theory from others is derived and some evidence in support of this implication is provided. …

We present a generalization of the standard random-search model of unemployment in which firms hire multiple workers … investigation of the out-of-steady state dynamics of our model. We find that the responses of unemployment and of the vacancy to … unemployment ratio to a shock to labor productivity can be somewhat more persistent than in the Mortensen-Pissarides benchmark …

number of good jobs. Minimum wages and unemployment insurance encourage workers to wait for higher wages and therefore induce … increase unemployment, will increase average labor productivity and may improve welfare. The paper then briefly investigates … improves considerably in response to higher minimum wages and more generous unemployment benefits …