question archive The search and matching model of unemployment tells us that: For consumers:For firms searching for work becomes more attractive the higher the market wage (w), the higher is labour market tightness (j), and the higher is unemployment insurance benefit (b)
The search and matching model of unemployment tells us that: For consumers:For firms searching for work becomes more attractive the higher the market wage (w), the higher is labour market tightness (j), and the higher is unemployment insurance benefit (b)
Subject:EconomicsPrice: Bought3
The search and matching model of unemployment tells us that: For consumers:For firms searching for work becomes more attractive the higher the market wage (w), the higher is labour market tightness (j), and the higher is unemployment insurance benefit (b).
: posting vacancies become more attractive the lower is the cost of posting a vacancy (k), the lower is labour market tightness (j), the higher is productivity (z), the lower is market wage (w).
In the wake of the COVID-19 pandemic, the unemployment rate in Canada has jumped from 7.8% in March to 13.7% in May (latest data point available see https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1410028701). The participation rate has declined from 63.5% to 61.4% and the employment rate has declined from 58.5% to 52.9%, during the same period.
Using the search and matching model, explain the statistics above by a discussion of how COVID-19 may have impacted the key model variables:
- number of firms (A) and workers searching (N)
- market wage (w)
- labour market tightness (j)
- unemployment insurance benefit (b)
- cost of posting a vacancy (k)
- productivity (z)
