University of Leicester; Institute for the Study of Labor (IZA)
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
Date posted: February 29, 2012
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