Search frictions and the long-run effects of labor-market policies

We analyze the macroeconomic effects on steady state macroeconomic variables of policy measures affecting the efficiency of the matching technology, the relative productivity of regular hours worked, the physical burden on employment; the cost of job vacancy posting and the santions on the firms caught employing undeclared work. Even though we concentrate on the different types of policies and on the stationary results of the model, we also pay attention to the dynamic behaviour of the main variables in order to provide a sound benchmark calibration for the US economy.