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• W2289754976 abstract "Before the 1970’s, similarly short durations but lower flows into unemployment meant that Europe had lower unemployment rates than the United States. But since 1980, higher durations have kept unemployment rates in Europe persistently higher than in the U.S. A general equilibrium search model with human capital explains how these outcomes arise from the way Europe’s higher firing costs and more generous unemployment compensation make its unemployment rate depend on a parameter that determines a worker’s loss of valuable skills after an involuntary job loss. An increase in that skill loss parameter after the 70s explains microeconomic findings that indicate that workers experienced more earnings volatility then. Our model also explains why, especially among older workers, hazard rates of gaining employment in Europe fall sharply with increases in the duration of unemployment, and why displaced workers in Europe experience smaller earnings losses and lower re-employment rates than those in the United States. The effects of layoff costs on unemployment rates depend on equilibrium proportions of frictional and structural unemployment that in turn depend on the generosity of unemployment benefits and the skill loss parameter that confronts displaced workers." @default.
• W2289754976 created "2016-06-24" @default.
• W2289754976 creator A5002088217 @default.
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• W2289754976 date "2005-01-01" @default.
• W2289754976 modified "2023-10-12" @default.
• W2289754976 title "Obsolescence, Uncertainty, and Heterogeneity: The European Employment Experience" @default.
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