The cost of business cycles for unskilled workers
By: Toshihiko Mukoyama and Ayşegül Şahin.
Contributors: Şahin, Ayşegül, 1972-; Federal Reserve Bank of New York.
Series: Staff reports ;; no. 214; Staff reports (Federal Reserve Bank of New York : Online) ;; no. 214.
Publisher: Federal Reserve Bank of New York
Published: 2005
Place of publication: [New York, N.Y.]
Language: eng
Format: Electronic resource
Subjects: Unskilled labor.; Business cycles.
Description: "This paper reconsiders the cost of business cycles under incomplete markets.  Primarily, we focus on the heterogeneity in the cost of business cycles among agents with different skill levels.  Unskilled workers are subject to a much larger risk of unemployment during recessions than are skilled workers.  Moreover, unskilled workers earn less income, which limits their ability to self-insure.  We examine how this heterogeneity in unemployment risk and income translates into heterogeneity in the cost of business cycles.  We set up a dynamic general equilibrium model with incomplete markets, in which there is heterogeneity in skills, employment status, asset holding, and the discount factor.  We find that the welfare cost of business cycles for unskilled workers is substantially higher than that for skilled workers"--Federal Reserve Bank of New York web site.
Notes: Includes bibliographical references.
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Mode of access: World Wide Web.