The high U.S. unemployment rate after the Great Recession is usually considered to be a result of changes in factors … in the unemployment rate, these factors should have influenced workers' and firms' decisions. Therefore, it is important … factors affect the unemployment rate. To address this issue, we estimate a Mortensen-Pissarides style of labor-market matching …

generates a negative effect on wages and an increase in the unemployment rate--and skilled workers, who benefit from higher … wages and lower unemployment. These changes in the labor market affect the government's revenue, resulting, in the long term …