Comparative advantage and unemployment
Worker heterogeneity in productivity and labor supply is introduced into a matching model. Workers who earn high wages and work high-hours are identified as those with strong market comparative advantage—high rents from being employed. The model is calibrated to match separation, job finding, and em...
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Published in | Journal of monetary economics Vol. 59; no. 2; pp. 150 - 165 |
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Main Authors | , , |
Format | Journal Article |
Language | English |
Published |
Amsterdam
Elsevier B.V
01.03.2012
Elsevier Sequoia S.A |
Subjects | |
Online Access | Get full text |
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Summary: | Worker heterogeneity in productivity and labor supply is introduced into a matching model. Workers who earn high wages and work high-hours are identified as those with strong market comparative advantage—high rents from being employed. The model is calibrated to match separation, job finding, and employment in the SIPP data. The model predicts a big drop in employment for workers with weak comparative advantage during recessions. But the data show that workers with strong comparative advantage also display sizable employment fluctuations, implying that aggregate employment fluctuations are not explained by the responses of workers with small rents to employment.
► Worker heterogeneity is introduced into a matching model. ► Identify workers with high wages and high-hours as those with strong comparative advantage. ► The model is calibrated to match separation, job finding, and employment in the data. ► Employment fluctuations are not explained by workers with weak comparative advantage. |
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Bibliography: | ObjectType-Article-2 SourceType-Scholarly Journals-1 ObjectType-Feature-1 content type line 23 |
ISSN: | 0304-3932 1873-1295 |
DOI: | 10.1016/j.jmoneco.2012.01.001 |