Open Access

Job Differentiation vs. Unemployment

  
Apr 20, 2013

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We use a matching model in which the horizontal job differentiation results from the rationale response of firms to the state of the labor market. We show that a decrease in the labor market tightness gives firms an incentive to raise the differentiation degree of jobs. Comparative statics suggests that an increase in unemployment benefits and in the minimum wage improves productivity of skilled workers by making jobs more differentiated, and leads to a raise in unemployment rate.

Language:
English
Publication timeframe:
2 times per year
Journal Subjects:
Business and Economics, Political Economics, Economic Theory, Systems and Structures