Job Differentiation vs. Unemployment

Issue: 1/2013

Samir Amine

Université du Québec en Outaouais and CIRANO, 283 boul. Alexandre-Taché, C.P. 1250, succursale Hull, Gatineau, Québec, Canada, J8X 3X7, and CIRANO, Montréal, Canada, email :

We use a matching model in which the horizontal job differentiation results from the rationale response of firms to the state of the labor market. We show that a decrease in the labor market tightness gives firms an incentive to raise the differentiation degree of jobs. Comparative statics suggests that an increase in unemployment benefits and in the minimum wage improves productivity of skilled workers by making jobs more differentiated, and leads to a raise in unemployment rate.

DOI: 10.2478/v10135-012-0014-6
JEL: J65, J64
Keywords: Unemployment, Productivity, Matching, Job Differentiation

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