Thèses sur le sujet « Unemployment – England – Mathematical models »

The thesis examines the impact of a partial switch to a share system in Canada on unemployment and inflation. Simulations with an independent Canadian macro model and Canadian data for the period 1973-1983 show that profit sharing will not always resolve unemployment and inflation, as claimed by Martin Weitzman. Some combinations of the share parameters resolve them, while others aggravate them. Thus, the combinations of the share parameters play a key role in terms of impact of the profit sharing on unemployment and inflation.

The goal of this dissertation is to illustrate the importance and feasibility of conducting policy evaluations which pay attention to both efficiency and equity. Introducing an equity criterion necessarily involves introducing value judgements, but I suggest that objectivity can be maintained through the adoption of an 'ethically flexible' approach. That is, an analyst can avoid imposing his own particular values by explicitly conducting the evaluation from a number of different ethical positions. This dissertation illustrates the feasibility of an ethically flexible approach by carrying out an evaluation of the proposals for the reform of the Canadian Unemployment Insurance (UI) programme made by the Macdonald and Forget Commissions. The evaluation proceeds in four stages: 1. Behavioural models which take account of the existence of unemployment and UI are developed. 2. The models are estimated using an appropriate Canadian data set. 3. The estimated models are used to simulate behavioural responses to UI reform. 4. Estimation and simulation results are used to carry out the ethically flexible welfare evaluation. Two household labour-supply models are used. The first assumes that observed unemployment is the outcome of utility-maximizing choices. The second introduces the possibility that demand-side constraints may interfere with supply-side choices. A form of switching regression with sample separation unknown is developed to allow estimation of 'constrained' labour-supply functions. Additional problems for estimation include a budget constraint which is non-linear as a result of the UI programme and a dependent variable, weeks of leisure (unemployment), which is limited to values between zero and fifty-two. Both unconstrained and constrained models are estimated for single men, single women and couples, using linear expenditure systems and data from the 1982 Survey of Consumer Finance. Estimation results suggest that constrained labour-supply functions are less elastic than unconstrained functions, that there is no observable difference between the labour-supply behaviour of men and women in a constrained model, and that cross-effects are important in the determination of the labour-supply behaviour of couples. Estimated probabilities of constraint take an average value of (approximately) 80 percent. The simulation of behavioural responses to UI reform using the estimated unconstrained labour-supply functions suggests that large reductions in unemployment might be anticipated. Simulation using the constrained labour-supply functions suggests that responses may be negligible. Welfare evaluation measures are constructed for three ethical perspectives: The first is in the spirit of Utilitarianism; the second is in the spirit of John Rawls' theory of justice; the third is in the spirit of Robert Nozick's entitlement theory. The 'Utilitarian' measure is a mean of order r over the distribution of individual utilities. (Explicit interpersonal comparisons are required for these evaluations.) The 'Rawlsian' measure is a mean of order r over the distribution of individual incomes, censored at the poverty line to focus attention on the worst-off group. The 'Entitlement' measure is a measure of the distance between the distribution of individual costs (premiums) and benefits derived from UI. Three factors are important in the- determination of the welfare-evaluation results. First, the ethical position adopted matters. Both UI reform proposals appear welfare-reducing from a Utilitarian perspective and welfare-improving from an Entitlement perspective. Second, for the Rawlsian and Utilitarian evaluations, the assumed degree of inequality aversion is important. Finally, assumptions made about the nature of unemployment are critical. This is most clearly illustrated by the Rawlsian results. If unemployment is assumed to be the outcome of utility-maximizing choices, then both reform proposals appear welfare-improving: poor people choose to work more and their incomes increase. If unemployment may be the result of demand-side constraints so that increases in employment are not possible, then UI reform merely results in reductions in income for the worst-off group. These results illustrate the importance of both the equity and the efficiency dimensions of a policy evaluation. This thesis demonstrates the feasibility of conducting an objective policy evaluation which pays attention to both.
Arts, Faculty of
Vancouver School of Economics
Graduate

Inflation and unemployment are perhaps the two most important challenges that face the South African economy of today. Firstly, the study examines the relationship between monetary policy and the two economic fundamentals (inflation and unemployment), using the VEC modeling technique. The model regresses the monetary policy variable against inflation and unemployment growth over the period 1980-2008. The results suggest that (1) there is a long run relationship between inflation and unemployment (2) monetary policy reacts more to variations in inflation compared to variations in unemployment. Secondly, the relationship between inflation and unemployment as explained by the Phillips curve is investigated. The results show that there is a positive relationship between inflation and unemployment.

Résumé de la thèse d’Alexandre Janiak intitulée « Essais sur la mobilité géographique, sectorielle et intra-sectorielle en périodes de changement structurel »

Le changement structurel est un processus nécessaire qui améliore considérablement les conditions de vie dans nos sociétés. Il peut découler par exemple de l'introduction de nouvelles avancées technologiques qui permettent d'augmenter à long terme la productivité agrégée dans nos économies. En retour, la hausse de la productivité a un impact sur notre consommation de tous les jours. Elle nous permet notamment de vivre dans un plus grand confort. Les individus peuvent alors s'épanouir dans leur ensemble. Il est évident que le changement structurel peut prendre d'autres formes que celle du changement technologique, mais il est souvent issu d'une transformation des forces qui influencent les marchés et en général aboutit à long terme à une amélioration du bien-être global.

Mais le changement structurel est aussi un processus douloureux. Il peut durer plusieurs décennies et, durant cette période, nous sommes beaucoup à devoir en supporter les coûts. Comme nous allons l'illustrer dans ce chapitre introductif, le changement structurel a pour conséquence une modification du rapport aux facteurs de production, ce qui alors mène à modifier l'ensemble des prix relatifs qui caractérisent une économie. En particulier, la modification des prix est due à une transformation des demandes relatives de facteurs. Ces derniers se révèlent alors inutiles à l'exécution de certaines tâches ou sont fortement demandés dans d'autres points de l'économie.

Souvent, le changement structurel entraîne alors un processus de réallocation. Des pans entiers de travailleurs doivent par conséquent se réallouer à d'autres tâches. Les lois du marché les incitent ainsi à devoir s'adapter à un nouveau contexte, mais elles le font pour un futur meilleur.

Cette thèse s'intéresse à cette problématique. Elle suppose que tout processus de changement structurel implique un mouvement de réallocation des facteurs de production, notamment des travailleurs puisqu'il s'agit d'une thèse en économie du travail, mais qu'un tel processus engendre souvent des coûts non négligeables. Elle se veut surtout positive, mais la nature des questions qu'elle pose mène naturellement à un débat normatif. Par exemple, elle cherche des réponses aux interrogations suivantes: comment s'ajuste une économie au changement structurel? Quelle est la nature des coûts associés au changement? Ces coûts peuvent-ils en excéder les gains? Le processus de réallocation en vaut-il vraiment la peine? Les gains issus d'un tel processus sont-ils distribués de manière égale?

La thèse est composée de quatre chapitres qui chacun considère l’impact d’un changement structurel particulier.

Le premier chapitre s’intéresse à l’impact de l’ouverture internationale aux échanges sur le niveau de l’emploi. Il s’appuie sur des travaux récents en économie internationale qui ont montré que la libéralisation du commerce mène à l’expansion des firmes les plus productives et à la destruction des entreprises dont la productivité est moins élevée. La raison de cette dichotomie est la présence d’un coût à l’entrée sur le marché des exports qui a été documentée par de nombreuses études. Certaines entreprises se développent suite à la libéralisation car elles ont accès à de nouveaux marchés et d’autres meurent car elles ne peuvent pas faire face aux entreprises les plus productives. Puisque le commerce crée à la fois des emplois et en détruit d’autres, ce chapitre a pour but de déterminer l’effet net de ce processus de réallocation sur le niveau agrégé de l’emploi.

Dans cette perspective, il présente un modèle avec firmes hétérogènes où pour exporter une entreprise doit payer un coût fixe, ce qui implique que seules les entreprises les plus productives peuvent entrer sur le marché international. Le modèle génère le processus de réallocation que l’ouverture au commerce international suppose. En effet, comme les entreprises les plus productives veulent exporter, elles vont donc embaucher plus de travailleurs, mais comme elles sont également capables de fixer des prix moins élevés et que les biens sont substituables, les entreprises les moins productives vont donc faire faillite. L’effet net sur l’emploi est négatif car les exportateurs ont à la marge moins d’incitants à embaucher des travailleurs du au comportement de concurrence monopolistique.

Le chapitre analyse également d’un point de vue empirique l’effet d’une ouverture au commerce au niveau sectoriel sur les flux d’emplois. Les résultats empiriques confirment ceux du modèle, c’est-à-dire qu’une hausse de l’ouverture au commerce génère plus de destructions que de créations d’emplois au niveau d’un secteur.

Le second chapitre considère un modèle similaire à celui du premier chapitre, mais se focalise plutôt sur l’effet du commerce en termes de bien-être. Il montre notamment que l’impact dépend en fait de la courbe de demande de travail agrégée. Si la courbe est croissante, l’effet est positif, alors qu’il est négatif si elle est décroissante.

Le troisième chapitre essaie de comprendre quels sont les déterminants de la mobilité géographique. Le but est notamment d’étudier le niveau du chômage en Europe. En effet, la littérature a souvent affirmé que la faible mobilité géographique du travail est un facteur de chômage lorsque les travailleurs sans emploi préfèrent rester dans leur région d’origine plutôt que d’aller prospecter dans les régions les plus dynamiques. Il semble donc rationnel pour ces individus de créer des liens sociaux locaux si ils anticipent qu’ils ne déménageront pas vers une autre région. De même, une fois le capital social local accumulé, les incitants à la mobilité sont réduits.

Le troisième chapitre illustre donc un modèle caractérisé par diverses complémentarités qui mènent à des équilibres multiples (un équilibre avec beaucoup de capital social local, peu de mobilité et un chômage élevé et un autre avec des caractéristiques opposées). Le modèle montre également que le capital social local est systématiquement négatif pour la mobilité et peut être négatif pour l’emploi, mais d’autres types de capital social peuvent en fait faire augmenter le niveau de l’emploi.

Dans ce troisième chapitre, une illustration empirique qui se base sur plusieurs mesures montre que le capital social est un facteur dominant d’immobilité. C’est aussi un facteur de chômage lorsque le capital social est clairement local, alors que d’autres types de capital social s’avèrent avoir un effet positif sur le taux d’emploi. Cette partie empirique illustre également la causalité inverse où des individus qui vivent dans une région qui ne correspond pas à leur région de naissance accumulent moins de capital social local, ce qui donne de la crédibilité à une théorie d’équilibres multiples.

Finalement, en observant que les individus dans le Sud de l’Europe semblent accumuler plus de capital social local, alors que dans le Nord de l’Europe on tend à investir dans des types plus généraux de capital social, nous suggérons qu’une partie du problème de chômage en Europe peut mieux se comprendre grâce au concept de capital social local.

Enfin, le quatrième chapitre s’intéresse à l’effet de la croissance économique sur la qualité des emplois. En particulier, il analyse le fait qu’un individu puisse avoir un emploi qui corresponde ou non à ses qualifications, ce qui, dans le contexte de ce chapitre, détermine s’il s’agit de bons ou mauvais emplois.

Ce chapitre se base sur deux mécanismes qui ont été largement abordés par la littérature. Le premier est le concept de « destruction créatrice » qui dit que la croissance détruit de nouveaux emplois car elle les rend obsolètes. Le second est le processus de « capitalisation » qui nous dit que la croissance va créer de nombreux emplois car les entreprises anticipent des profits plus élevés dans le futur.

Alors que des études récentes, suggèrent que la destruction créatrice ne permet pas d’expliquer le lien entre croissance et chômage, ce chapitre montre qu’un tel concept permet de mieux comprendre la relation entre croissance et qualité des emplois.

Avec des données issues du panel européen, nous illustrons que la corrélation entre croissance et qualité des emplois est positive. Nous présentons une série de trois modèles qui diffèrent de la manière suivante :(i) le fait de pouvoir chercher un emploi ou non alors qu’on en a déjà un, (ii) le fait pour une entreprise de pouvoir acquérir des équipements modernes. Les résultats suggèrent que pour expliquer l’effet de la croissance sur la qualité des emplois, la meilleure stratégie est une combinaison entre les effets dits de destruction créatrice et de capitalisation. Alors que le premier effet influence le taux de destruction des mauvais emplois, le second a un impact sur la mobilité du travail des mauvais vers les bons emplois.

Doctorat en Sciences économiques et de gestion
info:eu-repo/semantics/nonPublished

Defence date: 30 March 1998
Examining Board: Prof. John Micklewright, EUI and UNICEF, Florence, (Supervisor); Prof. Stephen Pudney, University of Leicester; Prof. Robert Waldmann, EUI and IGIER, Milan; Prof. Ian Walker, Keele University

Leung Ping-Fai.
Thesis (M.Phil.)--Chinese University of Hong Kong, 2002.
Includes bibliographical references (leaves 62-64).
Abstracts in English and Chinese.
Abstract --- p.i
Acknowledgement --- p.iii
Table of Content --- p.iv
List of Appendices --- p.v
Chapter Chapter 1. --- Introduction --- p.1
Chapter Chapter 2. --- Literature Review --- p.6
Chapter 2.1 --- Public Goods and Taxation --- p.6
Chapter 2.2 --- Public Goods as Intermediate Goods --- p.12
Chapter 2.3 --- Wage Differentials and Unemployment --- p.18
Chapter Chapter 3. --- The Basic Model and Effects of Public Inputs --- p.22
Chapter Chapter 4. --- "Public Inputs, Financing Constraints and National Welfare: The Tariff Case" --- p.30
Chapter Chapter 5. --- "Public Inputs, Financing Constraints and National Welfare: The Quota Case" --- p.43
Chapter Chapter 6. --- Concluding Remarks --- p.55
Chapter Chapter 7. --- Appendices --- p.57
References --- p.62

by Chan, Yuk Fai Weslie.
Thesis (M.Phil.)--Chinese University of Hong Kong, 1999.
Includes bibliographical references (leaves 67-70).
Abstracts in English and Chinese.
Acknowledgments --- p.ii
English Abstract --- p.iv
Chinese Abstract --- p.v
Table of Contents --- p.vi
List of Tables --- p.viii
List of Figures --- p.ix
List of Appendices --- p.x
Chapter Chapter 1. --- Introduction --- p.1
Chapter Chapter 2. --- Theoretical Background --- p.6
Chapter 2.1 --- Concepts of Beveridge Curve --- p.7
Chapter 2.2 --- Beveridge Curve Derived from Labori Market Stock-Flow Identities --- p.15
Chapter 2.2.1 --- Some Basic Labor Market Stork-Flow Identities --- p.15
Chapter 2.2.2 --- Steady State Properties of Beveridge Curve --- p.19
Chapter 2.2.3 --- Comparative Static Analysis of Beveridge Curve --- p.20
Chapter 2.2.4 --- Short Run Dynamics along Beveridge Curve --- p.24
Chapter 2.3 --- Beveridge Curve Derived from Matching Function Approach --- p.25
Chapter Chapter 3. --- Empirical Evidences --- p.28
Chapter 3.1 --- Decomposition of Total Unemployment of Hong Kong --- p.28
Chapter 3.2 --- Beveridge Curve of Hong Kong --- p.31
Chapter 3.2.1 --- Time Series Estimation of Hong Kong's Beveridge Curve --- p.32
Chapter 3.2.2 --- Cross Sectorial Estimation of Hong Kong's Beveridge Curve --- p.33
Chapter 3.3 --- Natural Unemployment Rate --- p.34
Chapter 3.4 --- Unemployment-Vacancy Ratio --- p.36
Chapter 3.4.1 --- Relation between U-V Ratio and K-L ratio --- p.38
Chapter Chapter 4. --- Conclusion --- p.41
Tables --- p.42
Figures --- p.46
Appendices --- p.56
Bibliography --- p.64

Wong, Pui Hang.
Thesis (M.Phil.)--Chinese University of Hong Kong, 2007.
Includes bibliographical references (leaves 58-61).
Abstracts in English and Chinese.
Chapter 1 --- Introduction --- p.1
Chapter 1.1 --- Characterizing Illegal Immigrants --- p.2
Chapter 1.2 --- Job Displacement --- p.5
Chapter 2 --- Minimum Wage Unemployment --- p.10
Chapter 2.1 --- The Basic Model --- p.11
Chapter 2.2 --- The Effect of Illegal Immigration --- p.14
Chapter 2.2.1 --- The Solow Model --- p.15
Chapter 2.2.2 --- The Decentralized Ramsey Model --- p.21
Chapter 3 --- Frictional Unemployment --- p.26
Chapter 3.1 --- The Basic Model --- p.27
Chapter 3.1.1 --- The Economy with Illegal Migrants --- p.32
Chapter 3.2 --- Productivity Effect --- p.36
Chapter 3.2.1 --- Comparative Statics --- p.38
Chapter 3.2.2 --- Unemployment --- p.40
Chapter 3.3 --- Exploitation Effect --- p.41
Chapter 3.3.1 --- A Simulation Example --- p.47
Chapter 3.4 --- Immigration Controls --- p.48
Chapter 3.4.1 --- Workplace Sanction --- p.49
Chapter 3.4.2 --- Deportation & Border Patrol --- p.53
Chapter 4 --- Conclusion --- p.56

Defence date: 9 November 2007
Examining Board: Prof. Jaap Dronkers, European University Institute, Supervisor ; Prof. Gøsta Esping-Andersen, Pompeu Fabra University, External Co-Supervisor ; Prof. Andrea Ichino, University of Bologna ; Prof. Wout Ultee, Radboud University, Nijmegen
First made available online on 9 April 2018
Unemployment does not hit only individual workers, it affects their families as well. There has been increasing interest in household joblessness and the polarisation of work across households. The consequences of household joblessness on well-being can be dramatic. Jobless households have a high risk of poverty and household joblessness can affect the long-term outcomes of adults and children living in such households. The objective of this dissertation is to contribute to the understanding of household joblessness in Europe by analysing couples in which both partners are simultaneously without work. Using data from the European Community Household Panel, I focus on three areas, which have received little attention in the literature.

Defence date: 9 November 2007
Examining board: Prof. Jaap Dronkers, European University Institute, Supervisor ; Prof. Gøsta Esping-Andersen, Pompeu Fabra University, External Co-Supervisor ; Prof. Andrea Ichino, University of Bologna ; Prof. Wout Ultee, Radboud University, Nijmegen
First made available online: 16 July 2021
A widespread theme pervades both political theory and the social sciences, in which participation in certain types of democratic institutions could create a more competent, active and public-spirited citizenry. While the school of democracy hypothesis has seen a recent renewal, little empirical research has been carried out in order to evaluate it rigorously. I tried to answer this crucial democratic question by leading an ethnographic study in three cases of municipal participatory budgeting in France, Italy and Spain. They indeed appeared as good training grounds for individuals, as they are empowered institutions that aim at including lay citizens in the discussion and production of local public policies. After almost two years of precise micro-sociological research, I saw people change, sometimes radically. Some, disappointed by their experience, became increasingly cynical about participatory democracy and politics in general. Many others however acquired new civic skills and competences, a wider knowledge of their environment and of the political system, and became increasingly involved in associations, social movements and political parties. Some even became professional and were integrated in municipal electoral teams. Participatory democracy has therefore the potential to empower citizens and create new local elites - be they critical ones, re-boosting civil society, or institutionalised ones, regenerating representative government. Some specific factors appeared crucial in the pattern of self-change I observed. Firstly, the biographical availability and previous political experiences of actors had a decisive impact. Secondly, self-change required mastering the discursive rules of competent behaviour of the institution - what I call their grammatical rules - to be integrated and thus experience intensive participation. Mastering the norms of good behaviour in public - learned through trial and error, and from sanctions and rewards mechanisms, i.e. from the power of the emotions felt in public and especially under the eyes of unknown strangers - people had then the chance to see their personal and political trajectories more radically affected. The individual impact of the involvement in participatory democracy institutions seems therefore to be both the increased civic competence of actors, but also the exclusion of the unskilled and incompetent citizens. The process of self-change can therefore appear as both fostering emancipation and exclusion.

Lo, Kai Lisa.
Thesis (M.Phil.)--Chinese University of Hong Kong, 2009.
Includes bibliographical references (leaves 43-46).
Abstract also in Chinese.
Chapter 1. --- Introduction --- p.7
Chapter 2. --- Literature Review --- p.10
Chapter 3. --- Measuring the Labor Share with US Data --- p.14
Chapter 3.1 --- Definition and Measurement --- p.14
Chapter 3.2 --- Some Crude Evidence --- p.16
Chapter 4. --- A Theoretical Relationship between Labor Share and Inflation in an Open Economy --- p.19
Chapter 4.1 --- A Static Closed-economy Pricing Model --- p.20
Chapter 4.2 --- Dynamic Model Based on Quadratic Adjustment Costs --- p.22
Chapter 4.3 --- An Open-economy Dynamic Pricing Model --- p.30
Chapter 5. --- An Empirical Investigation --- p.34
Chapter 5.1 --- Data --- p.34
Chapter 5.2 --- Estimation Results --- p.36
Chapter 5.2.1 --- General Findings --- p.37
Chapter 5.2.2 --- The Role of Adjustment Costs --- p.39
Chapter 5.2.3 --- Predicting U.S. Inflation --- p.40
Chapter 6. --- Conclusions --- p.42
References --- p.43
Figures and Tables --- p.47
Data Appendix --- p.56

Dissertação de mest., Ciências Económicas e Empresariais, Universidade do Algarve, Unidade de Ciências Económicas e Empresariais e Universidade Técnica de Lisboa, Instituto Superior de Economia e Gestão, 2001
Neste estudo, pretende-se equacionar a temática do desemprego sazonal, na indústria hoteleira algarvia, tendo por factores base de análise os seguintes itens: Emprego/Desemprego; Formação Profissional; Aumento da Estabilidade Laboral e Contratual; Produtividade; Gastos com Pessoal e Operacionalização da Formação. Os quais consubstanciam as principais preocupações, relativas à abordagem desenvolvida neste trabalho de investigação. Através da construção e manipulação de um modelo matemático, representativo da evolução mensal do número de Pessoas ao Serviço na Hotelaria do Algarve, elaborou-se um conjunto de cenários e quantificou-se alguns parâmetros chave desta abordagem. Tendo consciência de que é necessário tomar medidas que atenuem os efeitos negativos da sazonalidade do sector hoteleiro, sugere-se a implementação de um conjunto de acções, que poderão aumentar os níveis de actividade das empresas e, consequentemente, melhorar os seus resultados globais. Por outro lado, tendo em vista responder, de forma mais efectiva, às exigências actuais da indústria hoteleira, concebe-se um plano de Formação para os Recursos Humanos deste sector, tentando proporcionar uma maior empregabilidade e simultaneamente aumentar a qualidade da prestação de serviços, contribuindo, em última análise, para a melhoria da qualidade da oferta Hoteleira.

My dissertation focuses on the heterogeneity in labor markets. The first chapter proposes an explanation for the unemployment rate difference between skill groups. Low skill workers (workers without a four year college degree) have a higher unemployment rate. The reason for that "... is mainly because they (low skill workers) are more likely to become unemployed, not because they remain unemployed longer, once unemployed" (Layard, Nickell, Jackman, 1991, p. 44). This chapter proposes an explanation for the difference in job separation probabilities between these skill groups: high skill workers have lower job separation probabilities as they are selected more effectively during the hiring process. I use a labor search model with match specific quality to quantify the explanatory power of this hypothesis on differences in job separation probabilities and unemployment rates across skill groups. The second chapter analyzes the effects of one channel of interaction (job competition) between skill groups on their labor market outcomes. Do skilled workers prefer unskilled jobs to being unemployed? If so, skilled workers compete with unskilled workers for those jobs. Job competition generates interaction between the labor market outcomes of these groups. I use a heterogeneous agents model with skilled and unskilled workers in which the only interaction across groups is the job competition. Direct effects of job competition are reducing skilled unemployment rate (since they have a bigger market) and increasing the unskilled unemployment rate (since they face greater competition). However number of vacancies respond to job competition in equilibrium. For instance, unskilled firms have incentives to open more vacancies since filling a vacancy is easier if there is job competition. Thus how unskilled unemployment and wages are affected by job competition depends on which effect dominates. The results for reasonable parameter values show that job competition does reduce the average unemployment rate. It reduces the skilled unemployment rate more, generating an increase in unemployment rate inequality. However, the employment rate at skilled jobs is unaffected. The third chapter focuses on skill biased technological change. Skill biased technological change is one of the explanations for the asymmetry between labor market outcomes of skill groups over the last few decades. However, during this time period there were also skill neutral shocks that could contribute to these outcomes. The third chapter analyzes the effects of skill biased and neutral shocks on overall labor market variables. I use a model in which skilled and unskilled outputs are intermediate goods, and final good sector receives all the shocks. A numerical exercise shows that both skilled and unskilled unemployment rates respond to shocks in the same direction. The response of unemployment rate to skill neutral shocks is bigger than the response to skill biased shocks for both skill groups. However, the unskilled unemployment changes more than the skilled unemployment rate as a response to skill neutral shocks. Thus, skill neutral shocks reduce the unemployment rate gap between skill groups.
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