Electronic Resource
Oxford, UK and Boston, USA
:
Blackwell Publishers Ltd
Labour
12 (1998), S. 0
ISSN:
1467-9914
Source:
Blackwell Publishing Journal Backfiles 1879-2005
Topics:
Economics
Notes:
This paper investigates (un)employment dynamics in response to labour demand shocks using a small empirical flow model for the labour market in The Netherlands. The model explicitly takes account of the propagation of shocks through the various duration classes of unemployment and allows for duration dependence in the state of unemployment. A sensitivity analysis shows that 1. congestion in the matching process due to the increase in the pace of job creation and destruction may have substantial effects on (un)employment dynamics; 2. the effects depend very much on the initial pace of labour market dynamics and they are larger when the initial pace is low; 3. the labour market may be out of its equilibrium for quite a long time after a shock occurs; 4. fluctuations in the pace of job creation and destruction only lead to unemployment persistence in the model when the escape probability from long term unemployment is zero; otherwise, the economy returns to its original equilibrium, albeit with long adjustment lags in the case that the initial pace of structural change and/or the escape probability for long term unemployed is low.
Type of Medium:
Electronic Resource
URL:
http://dx.doi.org/10.1111/1467-9914.00082
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