Working Papers present research work by both Danmarks Nationalbank’s employees and our partners. Working Papers are primarily targeted at professionals and people with an interest in central banking research as well as economics and finance in a broader sense.
Why are marginal workers unemployed: low productivity or high opportunity cost of employment?
15% of Danish workers account for 60% of unemployment. Using administrative data and a structural model, I investigate whether these workers are repeatedly unemployed due to lower productivity or higher opportunity costs – a distinction crucial for optimal unemployment insurance design.