Department of Economics

Faculty of Arts and Social Sciences


Seminar - Upcoming

2013 Asia Summer Institute in Behavioral Economics
Asian Meeting of the Econometric Society 2013
Past Events
Department Seminar


Youth Unemployment and Jobless Recoveries: A Risk-based Explanation​ 


Yu Xu
University of Hong Kong



Sep 25, Mon

Time: 4 - 5:30 pm
Venue: Lim Tay Boh Seminar Room (AS2 03-12)
National University of Singapore
1 Arts Link, Singapore 117570

Chair: Huang Ji


We quantitatively analyze an equilibrium job-matching model in the presence of time-varying discount rates and persistent aggregate shocks to labor productivity. In our model workers and firms learn about an unobservable, idiosyncratic component of match productivity. We obtain three results. First, the unemployment rate of young, inexperienced workers is more sensitive to economic conditions than older, experienced workers. Second, labor productivity shocks are amplified and propagated more strongly in states with higher discount rates. We find this effect to be quantitatively large. Third, our model features jobless recoveries which are more pronounced after recessions in which risk premia is higher. We provide empirical evidence for these findings.