costs influence insider wages and outsiders' opportunities and how these costs affect employment and unemployment. We also … address the more complex, and open, question of how employment and unemployment move through time, in response to labor market …

We integrate social exclusion, operationalized in terms of long-term unemployment, into the theory of optimal …, in conjunction with optimal income taxation, contributes to redistribution and reduced long-term unemployment. The second … marginal cost, whereas public employment and unemployment benefits are underprovided. Our calibration shows how the policy mix …