The paper aims to assess the impact of selected elements of social harmonization on labor market performance in the European Union among two groups of workers — the total working population and the elderly. The aim is to examine whether upward changes in labor taxes affect employment,...

Shimer (2005) and Hall (2005) have documented the failure of standard labor market search models to match business cycle fluctuations in employment and unemployment. They argue that it is likely that wages are not adjusted as regularly as suggested by the model, which would explain why...

This paper analyses the influence of norms of fairness on wage formation. Fairness is defined by "real-wage" and "relative-wage" norms that relate wage offers to workers' own current wage and to the wages of other groups of workers, and, to avoid shirking, firms pay fair wages. The wage norms...

Standard search and matching models of equilibrium unemployment, once properly calibrated, can generate only a small amount of frictional wage dispersion, i.e., wage differentials among ex-ante similar workers induced purely by search frictions. We derive this result for a specific measure of...

In this Technical Appendix to Hornstein, Krusell, and Violante (2006) (HKV, 2006, hereafter) we provide a detailed characterization of the search model with (1) wage shocks during employment and (2) on-the-job search outlined in Sections 6 and 7 of that paper, and we derive all of the results...

The costs of job displacement are examined on a sample of Japanese workers successfully provided job placement services from 2000 to 2003, a period of economic stagnation and structural change in Japan. We find that displaced workers suffer a loss of approximately $1,100 for each additional year...

Standard macroeconomic models underpredict the volatility of unemployment fluctuations. A common solution is to assume wages are rigid. We explore whether this explanation is consistent with the data. We show that the wage of newly hired workers, unlike the aggregate wage, is volatile and...

We examine the period from 1991 to 2005 to document the effects of a changing Japanese labor market on trends in the cost of job change. During this period, job change penalties and the extent to which they were age-related grew. Evidence is also found of a diminishing specificity in human...

"Of the typically cited agglomeration advantages labor market pooling receives strong empirical support - yet remains under-explored theoretically. This paper presents a model of human capital formation in an imperfectly competitive, pooled local labor market with heterogeneous workers and...

In a non-stationary job search model we allow unemployed workers to have a permanent option to leave the labor force. Transitions into nonparticipation occur when reservation wages drop below the utility of being nonparticipant. Taking account of these transitions allows the identification of...