Search Capital

Carlos Carrillo-Tudela

University of Leicester; Institute for the Study of Labor (IZA)

Eric Smith

University of Essex - Department of Economics

February 28, 2012

CESifo Working Paper Series No. 3741

We construct a simple equilibrium search model in which workers accumulate information about previously met employment contacts. We term the latter search capital. Here search capital (partially) insures workers against adverse shocks. The model provides a theory of job-to-job transitions that are associated with voluntary or involuntary mobility and with wage rises or wage cuts. It also shows why low wage and younger workers are associated with a higher probability of becoming unemployed.

Number of Pages in PDF File: 8

Keywords: search capital, turnover, wage cuts

JEL Classification: J620, J630, J640

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Date posted: February 29, 2012  

Suggested Citation

Carrillo-Tudela, Carlos and Smith, Eric, Search Capital (February 28, 2012). CESifo Working Paper Series No. 3741. Available at SSRN: http://ssrn.com/abstract=2012203

Contact Information

Carlos Carrillo-Tudela (Contact Author)
University of Leicester ( email )
University Road
Leicester, LE1 7RH
United Kingdom

Institute for the Study of Labor (IZA)
P.O. Box 7240
Bonn, D-53072

Eric Smith
University of Essex - Department of Economics ( email )
Wivenhoe Park
Colchester CO4 3SQ
United Kingdom
Feedback to SSRN

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