labor markets. Upon a neutral shock, total unemployment decrease is two-staged: firstly with a reduction in unskilled … unemployment, and then due to a sharp decline of skilled unemployment when skill substitution dominates. A higher elasticity of …-specific unemployment ; human capital investment ; idiosyncratic shock ; skill substitution ; search and matching …

. The distribution of unemployment worker types adjusts slowly, which amplifies job creation in the short run. In the long … run, falling unemployment curtails the firms' vacancy posting. The model closely matches time-series moments from U …

unemployment, this paper theoretically investigates the importance of labor market duality on labor market volatilities. The new … insight is that duality leads to a non-linear reaction of unemployment volatility for both supply and demand shocks. A … subsequent empirical panel data analysis confirms the model predictions. Uncovering the non-linearity in unemployment volatility …