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Working Papers (1998), ESSEC Business School

A Simple Matching Model of Unemployment and Working Time Determination with Policy Implications

This paper develops a matching model, à la Pissarides (1990) to analyze working time and unemployment determination in an economy with trade frictions. The productive sector is represented by a large firm acting as a monopsonist in the labor market. The first part of the text analyzes an unregulated economic system, where employers hold the right to manage working time. By numerical simulation it is shown that in the steady state inside overwork and unemployment may unfortunately coexist. The model is then used to investigate the consequences in terms of unemployment of a binding constraint on working hours.

VRANCEANU, R. (1998). A Simple Matching Model of Unemployment and Working Time Determination with Policy Implications. ESSEC Business School.