42 Pages Posted: 4 Jul 2004
Date Written: June 1990
This paper explains upward job mobility and observed patterns of unemployment by skill as an economy recovers from a recession. Skilled unemployment is due to rational waiting by workers looking for long-term jobs when there is a "lock-in" effect. Lock-in occurs if the conditions in the labor market when a worker first accepts a job have a persistent effect on wages. Using longitudinal data, we provide empirical evidence of the cyclical pattern of wages predicted by the theory and also of lock-in.
Suggested Citation: Suggested Citation
Akerlof, George A. and Rose, Andrew Kenan and Yellen, Janet L., Waiting for Work (June 1990). NBER Working Paper No. w3385. Available at SSRN: https://ssrn.com/abstract=306401