A Model of Job and Worker Flows

Posted: 21 Dec 2007

See all articles by Nobuhiro Kiyotaki

Nobuhiro Kiyotaki

London School of Economics & Political Science (LSE) - Department of Economics; National Bureau of Economic Research (NBER)

Ricardo Lagos

New York University (NYU) - Department of Economics

Abstract

We develop an equilibrium search model that incorporates job-to-job transitions, exhibits instances of replacement hiring, and conceptually distinguishes between job and worker flows. We propose a notion of competitive equilibrium for random-matching environments and study the extent to which it achieves an efficient allocation of resources. The model can be used to study how the permanent incomes and employment states of individual workers evolve over time, the amount of worker turnover in excess of job reallocation, the lengths of job tenures and unemployment durations, and the size and persistence of changes in workers' incomes following displacements or job-to-job transitions.

Suggested Citation

Kiyotaki, Nobuhiro and Lagos, Ricardo, A Model of Job and Worker Flows. Journal of Political Economy, Vol. 115, No. 5, 2007. Available at SSRN: https://ssrn.com/abstract=1076650

Nobuhiro Kiyotaki

London School of Economics & Political Science (LSE) - Department of Economics ( email )

Houghton Street
London WC2A 2AE
United Kingdom

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Ricardo Lagos (Contact Author)

New York University (NYU) - Department of Economics ( email )

269 Mercer Street, 7th Floor
New York, NY 10011
United States
212-998-8937 (Phone)

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