Discussion paper

DP483 Unemployment through `Learning from Experience'

This paper shows that when workers have some market power and face substantial uncertainty concerning their productivity, it may be in their interest to formulate their wage claims with a view to the information thereby revealed. This learning behaviour may in turn be responsible for unemployment. Our analysis shows how the process of information acquisition through wage claims generates a higher rate of youth unemployment and long-term unemployment and a lower probability of dismissal for incumbent workers than would otherwise be the case.


Snower, D and S Alpern (1990), ‘DP483 Unemployment through `Learning from Experience'‘, CEPR Discussion Paper No. 483. CEPR Press, Paris & London. https://cepr.org/publications/dp483