Etienne Wasmer

Bio: Etienne Wasmer is an academic researcher from New York University Abu Dhabi. The author has contributed to research in topics: Unemployment & Wage. The author has an hindex of 30, co-authored 188 publications receiving 3917 citations. Previous affiliations of Etienne Wasmer include York University & University of Liège.

The Macroeconomics of Labor and Credit Market Imperfections

Abstract: Labor market frictions are not the only possible factor responsible for high unemployment. Credit market imperfections, driven by microeconomic frictions and impacted upon by macroeconomic factors such as monetary policy, could also be to blame. This paper shows that labor and credit market imperfections interact in a complementary way - which may explain why European and US unemployment differ so much when labor markets have become more similar at the margin in Europe and the US. To develop this idea, we build a search model that treats credit and labor market imperfections in a symmetrical way. We introduce specificity in credit relationships, and assume that credit to potential entrepreneurs is rationed due to endogenous search frictions, in the spirit of Diamond (1990). These imperfections mirror the job search frictions that we introduce, a la Mortensen- Pissarides (1994), in the labor market.

The Macroeconomics of Labor and Credit Market Imperfections

Abstract: Labour market frictions are not the only possible source of high unemployment. Credit market imperfections, driven by microeconomic frictions and influenced by macroeconomic factors, could also be to blame. To develop this idea in a simple and tractable macroeconomic model, we treat credit and labour market imperfections in a symmetrical way. Accordingly, we introduce specificity in credit relationships, and assume that credit to potential entrepreneurs is rationed due to endogenous search frictions, in the spirit of Diamond (1990). These imperfections mirror job search frictions in the labour market. We study the determination of equilibrium unemployment in the presence of credit market frictions both with exogenous and endogenous wages. We explore a number of possible extensions: endogenous destruction, monetary policy and the short-run effects of financial liberalization.

General versus Specific Skills in Labor Markets with Search Frictions and Firing Costs

Abstract: We show a fundamental property of human capital investments : they are not independent of the aggregate state of labor markets. In particular, frictions and slackness of the labor market raise the returns to specific human capital investments relative to general investments. This is a property that Becker's seminal contribution in the context of perfect labor markets did not consider. We then build a macroeconomic model where in equilibrium emerge different regimes. In the G-regime, workers invest in general skills. This occurs when they face high turnover labor markets and in the absence of employment protection. The S-regime in which workers invest in skills specific to their job appears when employment protection is high enough. Low job turnover is both a cause and a consequence of specifi ci nvestments in human capital. This paper then re-interprets Europe-US differences in arguing that the US are closer to the G-regime and Continental Europe to the S-regime. This conjecture provides, among other things, a rationale for differences in labor mobility and reallocation costs, which are typically ignored in American 'International Trade' textbooks while considered as extremely large in the public debate in Europe. In a S-regime, mobility costs are high and transitions between steady-states have especially strong adverse effects. On the other hand, in the steady-state, workers in the S-regimes are very productive. Each regime has thus its own coherence, although the European type incurs higher transition costs when macroeconomic conditions change.

Education and Training in Europe

Abstract: Introduction PART I THE MACROECONOMICS OF EDUCATION 1. Theory and Facts PART A- EDUCATION PRIORITIES: GROWTH VS. COHESION 2. Cohesion and the Supply of General Skills in Europe 3. Higher Education, Innovation, and Growth PART B- THE MARGINS OF IMPROVEMENT IN EDUCATION INSTITUTIONS: SKILL MISMATCH, SKILL PORTABILITY, AND MOBILITY 4. Internal Mobility, Skills, and Education 5. Skill Mismatch and Over-qualification in the Enlarged Europe 6. Specificity of Skills and Reallocation 7. Policy Implications PART II WORKPLACE TRAINING IN EUROPE 8. Introduction 9. An Overview of the Theoretical Framework 10. Stylised Facts About Workplace Training 11. Training and Labour Market Institutions 12. The Costs and Benefits of Workplace Training 13. Is There Scope for Policy? Final Remarks

Economics of Information

Abstract: The author systematically examines one of the important issues of information — establishing the market price. He introduces the concept of «search» — where a buyer wanting to get a better price, is forced to question sellers. The article deals with various aspects of finding the necessary information.

Education at a Glance

Abstract: A detailed review of the education sector in Australia as in the data provided by the 2006 edition of the OECD's annual publication, 'Education at a Glance' is presented. While the data has shown that in almost all OECD countries educational attainment levels are on the rise, with countries showing impressive gains in university qualifications, it also reveals that a large of share of young people still do not complete secondary school, which remains a baseline for successful entry into the labour market.