model framework to resolve that puzzle. Our efficiency wage model emphasizes the importance of the local unemployment rate … that nonzero steady involuntary unemployment at equilibrium may coexist with an efficiency wage that stays below the market …

properties of employment and unemployment equilibrium. Second, it applies the model to the study of employment fluctuations and … support policies and in their employment protection legislation than the USA. The chapter also surveys other reasons given in … to the explanation of differences in unemployment rates in industrialized countries. The search and matching model is …