Models of Individual Unemployment Duration

In this chapter we are concerned with theoretical approaches to individual unemployment duration. In part II.1 we consider an adaptation of the well known static labor supply model to the determination of individual unemployment. Essentially, the model assumes a Walrasian environment in which each individual chooses the length of the period over which he wants to stay out of work. We then turn in part II.2 to a decentralized labor market in which information about job openings and wages are imperfect and job search becomes necessary. Job search models considered in this chapter constitute the main theoretical underpinning to the empirical analysis of unemployment duration.