Investigating the Impact of a Labour Market Segmentation Using a Small DSGE Model with Search and Matching Frictions
| Authors | |
|---|---|
| Year of publication | 2017 |
| Type | Article in Proceedings |
| Conference | The 35th International Conference Mathematical Methods in Economics, Conference Proceedings |
| MU Faculty or unit | |
| Citation | |
| web | Conference proceedings |
| Field | Economy |
| Keywords | DSGE model; labour market segmentation; right-to-manage bargaining; search and matching frictions |
| Description | In this contribution, I present a small scale DSGE model of a closed economy with labour market segmentation, search and matching frictions, and right-to-manage bargaining. Constructed model stems from the well-known work of Lubik, however, was redesigned in order to account for different wage setting processes for different groups of workers. I introduce the model with two groups of individuals distinguished, according to the level of their qualification, to low-skilled and high-skilled. The aim of this contribution is to examine possibly dissimilar impacts of exogenous shocks to an economy where workers exhibit different levels of qualification. In this sense, I firstly introduce the model with labour market segmentation that splits the aggregate labour market between the following two sectors: one populated by workers with high level of qualification and the other with less qualified workers. This model is then calibrated to fit the characteristics of the US economy, and its dynamic properties are compared with the Lubik’s original model. |
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