A Matching Model of Non-Employment and Wage Pressure

摘要: In this paper a matching model with variable search intensity that incorporates the inactive is developed and calibrated. The used to look at possible explanations for recent sharp decline in UK working-age unemployment rate, which has been accompanied by only moderate reduction inactivity rate. From range of different shocks considered, most plausible combination consists significant benefits, perhaps reflecting reduced coverage, coupled an increase student population. According model, these would not have produced aggregate wage pressure.