Labor Market Policies in a Sector Specific Search Model with Heterogeneous Firms and Workers
AbstractThis paper analyzes the effects of unemployment benefits and minimum wage policies in a noncompetitive labor market with two sectors, two types of workers and sector specific search. It finds that those policies can shift the job composition towards low-wage jobs and that they will never increase the number of highâ€‘wage jobs. Welfare can only increase because of reduced social vacancy creation costs. The paper is an extension of Acemoglu (2001) who finds in the homogeneousâ€‘worker random search version of the model that the mentioned labor market policies can shift the job composition toward highâ€‘wage jobs, increase the number of highâ€‘wage jobs and welfare.
How to Cite
Navarro, L. (1). Labor Market Policies in a Sector Specific Search Model with Heterogeneous Firms and Workers. Economic Analysis Review, 22(2), 29-45. Retrieved from https://www.rae-ear.org/index.php/rae/article/view/71
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