Search

The rise of early retirement in Europe is typically attributed to the European system of taxes and transfers. A model with an imperfectly competitive labor market allows us to consider also the effects of bargaining power and of matching efficiency on pre‐retirement. We find that lower bargaining power of workers and declining matching efficiency have been important determinants of early retirement in France and Germany. These structural changes, combined with early retirement transfers and population aging, are also consistent with the employment and unemployment rates, labor share and seniority premia.

The rise of early retirement in Europe is typically attributed to the European system of taxes and transfers. Contrary to a purely neoclassical framework, a model with imperfectly competitive labor market also allows to consider the effect of the bargaining power of labor and matching efficiency on preretirement. We find that lower bargaining power of workers and less efficient labor markets characterized by the declining matching efficiency have been an important determinant of early retirement in France and Germany. These structural changes, combined with early-retirement transfers and population ageing, are also consistent with the joint evolution of employment and unemployment rates, the labor share and the seniority premium.

This thesis arose from curiosity about how labor market fortunes are determined in a world whereby decisions are taken in the presence of various labor market institutions, how well the computational general equilibrium models can match the observed labor market outcomes, and how has taken place the evolution of methodology employed by the studies of macro- and labor economics. This work is a modest attempt to better understand search and matching, their prehistory, as well as their ability to explain labor market phenomena and policy applications. As a result, this dissertation looks at the search and matching framework from various angles: historical, positive and normative. After studying the emergence of search and matching, we employ a number of computational general equilibrium models with embodied labor market frictions to test how they fare in reproducing the actual labor market outcomes and what policies could possibly be recommended on their basis. We focus predominantly on unemployment and a selection of institutions --- labor taxes, minimum wages and social security systems --- mainly in the European economies. One of the essays investigates whether a one-sided search model with human capital accumulation and mirco-level turbulence could be consistent with the Great Moderation. The following one studies the effect of tax cuts in the presence of minimum wages, job competition and on-the-job search. Finally, we look at the ability of a matching model placed in the OLG framework to explain the joint evolution of unemployment and participation in the last decades., (ECON 3) -- UCL, 2011

We use a calibrated general equilibrium model with heterogeneous labor and search to evaluate the quantitative effects of various labor tax cut scenarios. The focus is on skill heterogeneity combined with downward wage rigidities at the low end of the skill ladder. Workers can take jobs for which they are overeducated. We compare targeted and non-targeted tax cuts, both with or without over-education effects. Introducing over-education changes substantially the employment, productivity and welfare effects of a tax cut, although tax cuts targeted on the least skilled workers always have larger effects. (C) 2010 Society for Policy Modeling. Published by Elsevier Inc. All rights reserved.

The notion of frictional unemployment first arose in the writings of Beveridge, Pigou and Hicks. Why did it fail at the time to grow into a fully fledged theory ? Our answer is simple. This failure was due to the fact these economists were unwilling and/or unable to go beyond the then-prevailing Marshallian approach, in particular to depart from its trade organization assumptions. They did not realize that these assumptions excluded any rationing outcome in general, and any unemployment result in particular. We make our claim in three steps. First, we make explicit the trade-organization assumptions underpinning Marshall’s equilibrium theory. Our second step is a study of the attempts at introducing unemployment in a Marshallian framework. We start with an examination of Beveridge’s, Pigou’s and Hicks’s early works on wages and unemployment. We also briefly discuss how and why Keynes was able to shift attention from frictional to involuntary unemployment. Newt, for a reason that will become clear as the paper evolves, we ponder Friedman’s celebrated Presidential Address inaugurating the notion of a natural rate of unemployment. In our third and last step we look at the papers by McCall, Lucas and Prescott, Mortensen and Pissarides that paved the way for the present thriving research literature. We show that their success in providing an equilibrium unemployment result stems from the fact that they have indeed departed from the Marshallian trade-organization assumptions

Significant differences in unemployment in Europe have been observed across skill groups, with the least skilled suffering the highest and most persistent unemployment rates. To identify policies alleviating this problem, we study the impact of reductions in employer social security contributions. We construct a general equilibrium model with three types of workers and firms, matching frictions, wage bargaining and a rigid minimum wage. We find evidence in favour of narrow tax cuts targeted at the minimum wage, but we argue that it is most important to account for the effects of such reductions on both job creation and job destruction. The failure to do so may explain the gap between macro- and microeconometric evaluations of such policies in France and Belgium. Policy impact on welfare and inefficiencies induced by job competition, ladder effects and on-the-job search are quantified and discussed.

We use a calibrated general equilibrium model with heterogeneous labor and search to evaluate the quantitative effects of various labor tax cut scenarios. The focus is on skill heterogeneity combined with downward wage rigidities at the low end of the skill ladder. Workers can take jobs for which they are overeducated. We compare targeted and nontargeted tax cuts, both with or without over-education effects. Introducing over-education changes substantially the employment, productivity and welfare effects of a tax cut, although tax cuts targeted on the least skilled workers always have larger effects.

Unemployment remains the main concern of most EU countries. Substantial differences are observed not only across countries but also across regions of the same country. Important differences also exist across skill groups. We focus here on the skill dimension and report on some results obtained for the Belgian economy, keeping in mind though that the analysis could be extended to other countries characterised by the same problems. We argue that low-skilled unemployment can be explained in terms of biased technological change and relative wage rigidities (related to labour market institutions). We explore in that context the effects of targeted labour tax cuts. We find that it is most important to take into account the effect of such tax cuts on both the job creation and the job destruction rates. The failure to do so may explain the gap between macro- and micro-econometric evaluations of such policies. We also briefly discuss the impact on welfare and examine the consequences of job competition (ladder effect).

Le chômage des jeunes est un problème préoccupant pour notre pays, tant au sud qu’au nord. Il touchait en 2003 21,5% des 15-24 ans (15,5% pour la moyenne UE-15) pour un taux de chômage de 8,1% tous âges confondus (définition OCDE du chômage). En 2003, dans les trois régions du pays, le taux de chômage relatif des personnes diplomées de l’enseignement primaire ou secondaire inférieur est entre deux et quatre fois plus important que celui des personnes titulaires d’un diplôme post-secondaire. Cette position relative défavorable des peu qualifiés est déjà ancienne. Les Gouvernements successifs ont depuis des années favorisé la (ré)insertion de personnes inoccupées sur le marché du travail par des allégements de charges sociales. La seule observation du nombre de travailleurs qui ouvrent le droit à ces allégements et du montant octroyé des diminutions de cotisations ne suffit pas pour préjuger de l’impact de ces politiques. Elle doit être complétée par des recherches notamment de nature économique. Dans ce contexte, la Politique scientifique fédérale a confié à l'Institut de Recherches économiques et sociales (IRES, UCL) une étude relative à l'évaluation d’un certain nombre d’allègements de la (para)-fiscalité en Belgique. Cette étude s’inscrit dans le cadre du programme de recherches "Cohésion sociale" (2001-2005). Sous l’angle microéconomique, il s’agit d’évaluer les modalités d’allégement du point de vue de l’insertion pour un jeune demandeur d’emploi de longue durée sans expérience de travail (sortie du chômage vers l’emploi, durée de celui-ci). Sous l’angle macroéconomique, l’objectif est d’évaluer les allégements sous l’angle des effets sur les choix technologiques et les processus de création/destruction d’emplois tenant compte de la négociation salariale, des qualifications diverses des travailleurs et de l’existence d’autres politiques (assurance-chômage, politiques actives).

The rise of early retirement in Europe is typically attributed to the European system of taxes and transfers. A model with an imperfectly competitive labor market allows us to consider also the effects of bargaining power and of matching efficiency on pre-retirement. We find that lower bargaining power of workers and declining matching efficiency have been important determinants of early retirement in France and Germany. These structural changes, combined with early-retirement transfers and population aging, are also consistent with the employment and unemployment rates, labor share and seniority premia.

The rise of early retirement in Europe is typically attributed to the European system of taxes and transfers. A model with an imperfectly competitive labor market allows us to consider also the effects of bargaining power and of matching efficiency on pre-retirement. We find that lower bargaining power of workers and declining matching efficiency have been important determinants of early retirement in France and Germany. These structural changes, combined with early-retirement transfers and population aging, are also consistent with the employment and unemployment rates, labor share and seniority premia.