Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/82196
Authors: 
Eriksson, Stefan
Year of Publication: 
2001
Series/Report no.: 
Working Paper, IFAU - Institute for Labour Market Policy Evaluation 2001:4
Abstract: 
This paper investigates the consequences of skill loss as a result of unemployment in an efficiency wage model with turnover costs and on-the-job search. Firms are unable to differentiate wages and therefore prefer to hire employed searchers or unemployed workers who have not lost human capital. It is shown that if some fundamental factor in the economy changes, this will result in a lengthy adjustment process with substantial long run unemployment effects. Moreover, the model is capable of generating persistence but the amount depends on the duration of the shock itself
Subjects: 
Efficiency wage
Turnover
On-the-job search
Skill loss
Persistence
Short- and long term unemployment
JEL: 
E24
J64
Document Type: 
Working Paper

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