In this paper a matching model with variable search intensity that incorporates the inactive is developed and calibrated. The model is used to look at possible explanations for the recent sharp decline in the UK working-age unemployment rate, which has been accompanied by only a moderate...

According to the Labour Force Survey, about 20% (approximately 7.5 million) of the non-student working-age population were not in paid employment in 2002. Of these people about one in five were classified as unemployed, with the remainder labelled as 'inactive.' Despite this categorisation,...

This article explains how changes in payroll taxes might affect real wages and employment. It then estimates the responses of relative wages, prices and employment to the changes in employers' National Insurance Contributions (NICs) that occurred in 1999. The empirical evidence is based on...