Retraining and long-term unemployment in a model of unlearning by not doing

Melvyn Coles; Adrian Masters

doi:10.1016/S0014-2921(99)00005-7

Retraining and long-term unemployment in a model of unlearning by not doing

Melvyn Coles, Adrian Masters

Economics

Research output: Contribution to journal › Article › peer-review

Abstract

This paper develops a dynamically consistent model of search, matching and bargaining when worker skills decline while unemployed. Long-term unemployment emerges as an endogenous phenomenon. Even with constant returns to matching, multiple Pareto rankable equilibria are possible. Policies to address long-term unemployment are best directed toward prevention (e.g. vacancy creation subsidies) rather than cure (e.g. retraining subsidies). (C) 2000 Elsevier Science B.V. All rights reserved.

Original language	English (US)
Pages (from-to)	1801-1822
Number of pages	22
Journal	European Economic Review
Volume	44
Issue number	9
DOIs	https://doi.org/10.1016/S0014-2921(99)00005-7
State	Published - 2000

Keywords

Long-term unemployment
Skill decay
Training

ASJC Scopus subject areas

Finance
Economics and Econometrics

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10.1016/S0014-2921(99)00005-7

Cite this

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title = "Retraining and long-term unemployment in a model of unlearning by not doing",

abstract = "This paper develops a dynamically consistent model of search, matching and bargaining when worker skills decline while unemployed. Long-term unemployment emerges as an endogenous phenomenon. Even with constant returns to matching, multiple Pareto rankable equilibria are possible. Policies to address long-term unemployment are best directed toward prevention (e.g. vacancy creation subsidies) rather than cure (e.g. retraining subsidies). (C) 2000 Elsevier Science B.V. All rights reserved.",

keywords = "Long-term unemployment, Skill decay, Training",

author = "Melvyn Coles and Adrian Masters",

note = "Funding Information: Helpful comments have been received from Ken Burdett, Eric Smith and seminar participants at the Universities of Essex, Keele and Warwick and at the Society for Economic Dynamics Conference held at Oxford, 1997. Financial support for both authors is gratefully acknowledged from The Leverhulme Trust and for Coles from La Comision Interministerial de Ciencia y Tecnologia. Copyright: Copyright 2007 Elsevier B.V., All rights reserved.",

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doi = "10.1016/S0014-2921(99)00005-7",

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AU - Coles, Melvyn

AU - Masters, Adrian

N1 - Funding Information: Helpful comments have been received from Ken Burdett, Eric Smith and seminar participants at the Universities of Essex, Keele and Warwick and at the Society for Economic Dynamics Conference held at Oxford, 1997. Financial support for both authors is gratefully acknowledged from The Leverhulme Trust and for Coles from La Comision Interministerial de Ciencia y Tecnologia. Copyright: Copyright 2007 Elsevier B.V., All rights reserved.

PY - 2000

Y1 - 2000

N2 - This paper develops a dynamically consistent model of search, matching and bargaining when worker skills decline while unemployed. Long-term unemployment emerges as an endogenous phenomenon. Even with constant returns to matching, multiple Pareto rankable equilibria are possible. Policies to address long-term unemployment are best directed toward prevention (e.g. vacancy creation subsidies) rather than cure (e.g. retraining subsidies). (C) 2000 Elsevier Science B.V. All rights reserved.

AB - This paper develops a dynamically consistent model of search, matching and bargaining when worker skills decline while unemployed. Long-term unemployment emerges as an endogenous phenomenon. Even with constant returns to matching, multiple Pareto rankable equilibria are possible. Policies to address long-term unemployment are best directed toward prevention (e.g. vacancy creation subsidies) rather than cure (e.g. retraining subsidies). (C) 2000 Elsevier Science B.V. All rights reserved.

KW - Long-term unemployment

KW - Skill decay

KW - Training

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JO - European Economic Review

JF - European Economic Review

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ER -

Retraining and long-term unemployment in a model of unlearning by not doing

Abstract

Keywords

ASJC Scopus subject areas

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