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Unemployment

About: Unemployment is a research topic. Over the lifetime, 60417 publications have been published within this topic receiving 1304566 citations. The topic is also known as: joblessness.


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Posted Content
TL;DR: In this paper, the impact of investments in human capital on an individual's potential earnings and psychic income was analyzed, taking into account varying cultures and political regimes, the research indicates that economic earnings tend to be positively correlated to education and skill level.
Abstract: A diverse array of factors may influence both earnings and consumption; however, this work primarily focuses on the impact of investments in human capital upon an individual's potential earnings and psychic income. For this study, investments in human capital include such factors as educational level, on-the-job skills training, health care, migration, and consideration of issues regarding regional prices and income. Taking into account varying cultures and political regimes, the research indicates that economic earnings tend to be positively correlated to education and skill level. Additionally, studies indicate an inverse correlation between education and unemployment. Presents a theoretical overview of the types of human capital and the impact of investment in human capital on earnings and rates of return. Then utilizes empirical data and research to analyze the theoretical issues related to investment in human capital, specifically formal education. Considered are such issues as costs and returns of investments, and social and private gains of individuals. The research compares and contrasts these factors based upon both education and skill level. Areas of future research are identified, including further analysis of issues regarding social gains and differing levels of success across different regions and countries. (AKP)

7,869 citations

Posted Content
TL;DR: In this paper, the authors examined why rural-urban labor migration persists and is even increasing in many developing nations despite the existence of positive marginal products in agriculture and significant levels of urban unemployment, and concluded that in the absence of wage flexibility an optimal policy would include both partial wage subsidies or direct government employment and measures to restrict free migration.
Abstract: This study examines why rural-urban labor migration persists and is even increasing in many developing nations despite the existence of positive marginal products in agriculture and significant levels of urban unemployment. Conventional economic models have difficulty reconciling rational behavioral explanations with growing levels of urban unemployment in the absence of absolute labor redundancy in the overall economy. This paper formulates a 2-sector model of rural-urban migration which recognizes the existence of a politically determined minimum urban wage at levels substantially higher than agricultural earnings. The distinguishing feature of the model is that migration proceeds in response to urban-rural differences in expected earnings with the urban employment rate acting as an equilibrating force on such migration. The overall model is used to demonstrate 1) that given the politically determined high minimum wage the continued existence of rural-urban migration in spite of substantial urban unemployment represents an economically rational choice on the part of the individual migrants and 2) that economists standard policy recommendation of generating urban employment opportunities through the use of "shadow prices" implemented by means of wage subsidies or direct government hiring may lead to a worsening of the urban unemployment problem. Welfare implications of alternative policies associated with various programs to retain rural population are assessed under the assumption that the full wage flexibility suggested by economic theory is politically unfeasible; it is concluded that in the absence of wage flexibility an optimal policy would include both partial wage subsidies or direct government employment and measures to restrict free migration. The basic model is a 2-sector internal trade model with unemployment the 2 sectors being the permanent urban sector which specializes in production of manufactured goods and the rural which either uses all available labor to produce agricultural goods or exports part of the labor to the urban sector. It is assumed that the typical migrant retains his ties to the rural sector but the assumption is not necessary for the argument.

5,592 citations

Posted Content
TL;DR: In this article, the authors studied the impact of competitive import licenses on the economy and the relationship between welfare cost of quantitative restrictions and tariff equivalents, and showed that the effect of wage legislation on equilibrium levels of unemployment.
Abstract: Studies the impact of competitive import licenses on the economy. Value of rents associated with import licenses; Relationship between welfare cost of quantitative restrictions and tariff equivalents; Impact of wage legislation on equilibrium levels of unemployment. (Из Ebsco)

4,933 citations

Book ChapterDOI
TL;DR: In this article, the authors show that the information structure of employer-employee relationships, in particular the inability of employers to costlessly observe workers' on-the-job effort, can explain involuntary unemployment as an equilibrium phenomenon.
Abstract: Involuntary unemployment appears to be a persistent feature of many modem labor markets. The presence of such unemployment raises the question of why wages do not fall to clear labor markets. In this paper we show how the information structure of employer-employee relationships, in particular the inability of employers to costlessly observe workers' on-the-job effort, can explain involuntary unemployment' as an equilibrium phenomenon. Indeed, we show that imperfect monitoring necessitates unemployment in equilibrium. The intuition behind our result is simple. Under the conventional competitive paradigm, in which all workers receive the market wage and there is no unemployment, the worst that can happen to a worker who shirks on the job is that he is fired. Since he can immediately be rehired, however, he pays no penalty for his misdemeanor. With imperfect monitoring and full employment, therefore, workers will choose to shirk. To induce its workers not to shirk, the firm attempts to pay more than the "going wage"; then, if a worker is caught shirking and is fired, he will pay a penalty. If it pays one firm to raise its wage, however, it will pay all firms to raise their wages. When they all raise their wages, the incentive not to shirk again disappears. But as all firms raise their wages, their demand for labor decreases, and unemployment results. With unemployment, even if all firms pay the same wages, a worker has an incentive not to shirk. For, if he is fired, an individual will not immediately obtain another job. The equilibrium unemployment rate must be sufficiently large that it pays workers to work rather than to take the risk of being caught shirking. The idea that the threat of firing a worker is a method of discipline is not novel. Guillermo Calvo (1981) studied a static model which involves equilibrium unemployment.2 No previous studies have treated general market equilibrium with dynamics, however, or studied the welfare properties of such unemployment equilibria. One key contribution of this paper is that the punishment associated with being fired is endogenous, as it depends on the equilibrium rate of unemployment. Our analysis thus goes beyond studies of information and incentives within organizations (such as Armen Alchian and Harold Demsetz, 1972, and the more recent and growing literature on worker-firm relations as a principal-agent problem) to inquire about the equilibrium conditions in markets with these informational features. The paper closest in spirit to ours is Steven Salop (1979) in which firms reduce turnover costs when they raise wages; here the savings from higher wages are on monitoring costs (or, at the same level of monitoring, from increased output due to increased effort). As in the Salop paper, the unemployment in this paper is definitely involuntary, and not of the standard search theory type (Peter Diamond, 1981, for example). Workers have perfect information about all job opportunities in our model, and unemployed workers strictly prefer to work at wages less than the prevailing market wage (rather than to remain unemployed); there are no vacancies. *Woodrow Wilson School of Public and International Affairs, and Department of Economics, respectively, Princeton University, Princeton, NJ 08540. We thank Peter Diamond, Gene Grossman, Ed Lazear, Steve Salop, and Mike Veall for helpful comments. Financial support from the National Science Foundation is appreciated. 'By involuntary unemployment we mean a situation where an unemployed worker is willing to work for less than the wage received by an equally skilled employed worker, yet no job offers are forthcoming. 2In his 1979 paper, Calvo surveyed a variety of models of unemployment, including his hierarchical firm model (also with Stanislaw Wellisz, 1979). There are a number of important differences between that work and this paper, including the specification of the monitoring technology.

4,817 citations

Book
01 Jan 1991
TL;DR: In this article, the authors present a review of the macroeconomics of the post-war unemployment in OECD countries and discuss the policies to cut the job search duration and the structure of the job market.
Abstract: Introduction to New Edition Preface to First Edition 1. Overview THE MICROFOUNDATIONS 2. Wage-Bargaining and Unions 3. Efficiency Wages 4. Wage Behaviour: the Evidence 5. Job Search: the Duration of Unemployment 6. Mismatch: the Structure of Unemployment 7. The Pricing and Employment Behaviour of Firms THE MACROECONOMIC OUTCOME 8. The Macroeconomics of Unemployment 9. Explaining Post-war Unemployment in OECD Countries POLICY IMPLICATIONS 10. Policies to Cut Unemployment Annexes Discussion Questions References

3,655 citations


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Performance
Metrics
No. of papers in the topic in previous years
YearPapers
20231,831
20224,069
20211,621
20202,244
20191,936
20182,037