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Training, Job Upgrading, Job Creation and Job Destruction

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  • António Menezes
  • José Vieira

Abstract

We extend the Mortensen and Pissarides ( 1999a , b ) model to feature an endogenous upgrading or training rate, to gain a novel, general equilibrium, approach to training and labour market policy to gain a distinct model from the traditional partial equilibrium approach (e.g. Acemoglu and Pischke 1998 ). Among other results, we show training subsidies decrease equilibrium unemployment incidence, duration and level and less generous unemployment benefits increase the occurance of training. We also show the high elasticity of job destruction to aggregate conditions causes the frequency of training to be procyclical. A calibrated version of our model rationalizes cross-country differences in labour and training equilibrium outcomes. Copyright International Atlantic Economic Society 2008

Suggested Citation

  • António Menezes & José Vieira, 2008. "Training, Job Upgrading, Job Creation and Job Destruction," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 36(3), pages 275-292, September.
    • Handle: RePEc:kap:atlecj:v:36:y:2008:i:3:p:275-292
    DOI: 10.1007/s11293-008-9137-7
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    References listed on IDEAS

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    More about this item

    Keywords

    Training; Matching models; Job creation; Job destruction; I00; J50; J08; J24; J64;
    All these keywords.

    JEL classification:

    • I00 - Health, Education, and Welfare - - General - - - General
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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