Comparative Advantage and Unemployment / Mark Bils, Yongsung Chang, Sun-Bin Kim.

By:

Bils, Mark

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Material type: Text

TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w15030.Publication details: Cambridge, Mass. National Bureau of Economic Research 2009.Description: 1 online resource: illustrations (black and white)Subject(s):

E24 - Employment • Unemployment • Wages • Intergenerational Income Distribution • Aggregate Human Capital • Aggregate Labor Productivity
E32 - Business Fluctuations • Cycles

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Abstract: We model unemployment allowing workers to differ by comparative advantage in market work. Workers with comparative advantage are identified by who works more hours when employed. This enables us to test the model by grouping workers based on their long-term wages and hours from panel data. The model captures the greater cyclicality of employment for workers with low comparative advantage. But the model fails to explain the magnitude of countercyclical separations for high-wage workers or the magnitude of procyclical findings for high-hours workers. As a result, it only captures the cyclicality of the extensive, employment margin for low-wage, low-hours workers.

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Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
Working Paper	Biblioteca Digital	Colección NBER	nber w15030 (Browse shelf(Opens below))	Not For Loan

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Previous	nber w15028 Land Policy: Founding Choices and Outcomes, 1781-1802 /	nber w15029 Technology Innovation and Diffusion as Sources of Output and Asset Price Fluctuations /	nber w1503 Recent Work on Business Cycles in Historical Perspective: Review of Theories and Evidence /	nber w15030 Comparative Advantage and Unemployment /	nber w15031 Energy Efficiency Economics and Policy /	nber w15032 Endogenous Cost-Effectiveness Analysis in Health Care Technology Adoption /	nber w15033 Wage Dispersion in the Search and Matching Model with Intra-Firm Bargaining /	Next

June 2009.

We model unemployment allowing workers to differ by comparative advantage in market work. Workers with comparative advantage are identified by who works more hours when employed. This enables us to test the model by grouping workers based on their long-term wages and hours from panel data. The model captures the greater cyclicality of employment for workers with low comparative advantage. But the model fails to explain the magnitude of countercyclical separations for high-wage workers or the magnitude of procyclical findings for high-hours workers. As a result, it only captures the cyclicality of the extensive, employment margin for low-wage, low-hours workers.