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The Cyclical Behavior of Unemployment and Vacancies with Loss of Skills during Unemployment

Author

Listed:
  • Victor Ortego-Marti

    (Department of Economics, University of California Riverside)

Abstract
This paper studies the cyclical fluctuations in unemployment and vacancies in a search and matching model in which workers lose skills during periods of unemployment. Firms’ profits fluctuate more because aggregate productivity affects the economy’s average human capital. Moreover, wages for workers with lower levels of human capital are closer to the value of non-market time, leading to more rigid wages. Fluctuations in the vacancy-unemployment ratio are larger than in the baseline search and matching model and similar to those we observe in the data.

Suggested Citation

  • Victor Ortego-Marti, 2015. "The Cyclical Behavior of Unemployment and Vacancies with Loss of Skills during Unemployment," Working Papers 201504, University of California at Riverside, Department of Economics.
    • Handle: RePEc:ucr:wpaper:201504
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    File URL: https://economics.ucr.edu/repec/ucr/wpaper/201504.pdf
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    References listed on IDEAS

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    Cited by:

    1. Lalé, Etienne, 2018. "Loss of skill and labor market fluctuations," Labour Economics, Elsevier, vol. 50(C), pages 20-31.
    2. Ortego-Marti, Victor, 2017. "Differences in skill loss during unemployment across industries and occupations," Economics Letters, Elsevier, vol. 161(C), pages 31-33.
    3. Jackson, Paul & Ortego-Marti, Victor, 2024. "Skill loss during unemployment and the scarring effects of the COVID-19 pandemic," Labour Economics, Elsevier, vol. 88(C).

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    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment

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