Are the Unemployed Unemployable?

Saint-Paul, Gilles

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Are the Unemployed Unemployable?

IMF Working Paper No. 94/64

24 Pages Posted: 15 Feb 2006

See all articles by Gilles Saint-Paul

Gilles Saint-Paul

University of Toulouse I - GREMAQ-IDEI; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute); IZA Institute of Labor Economics

Date Written: June 1994

Abstract

This paper develops a matching model of the labor market under wage rigidity when hiring decisions are irreversible. There are two types of workers, the skilled and the unskilled. The model is used to analyze whether technological advances may have increased unemployment. It is shown that it is likely to be so if they are associated with an increase in the productivity and/or the supply of skilled workers relative to unskilled workers. These effects are stronger when hiring decisions are more irreversible.

JEL Classification: J64, J65, J68

Suggested Citation: Suggested Citation

Saint-Paul, Gilles, Are the Unemployed Unemployable? (June 1994). IMF Working Paper No. 94/64, Available at SSRN: https://ssrn.com/abstract=883544