Unemployment, Vacancies and the Long-Term Unemployed

This paper is concerned with two related features of the labor market-the ratio of long-term to total unemployment, R, and the relat ionship between unemployment and vacancies (the "U-V curve"). A model is developed to explain R in terms of the average probability that an unemployed person will find a job within a particular time period. When the authors add the empirically confirmed hypothesis that this exit probability is lower for the long-term than it is for the short-term unemployed, the n the model is consistent with the observed pattern of unemployment.