Ranking of Job Applicants, On-the-Job Search and Persistent Unemployment

38 Pages Posted: 15 May 2000

See all articles by Nils Gottfries

Nils Gottfries

Uppsala University - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute); IZA Institute of Labor Economics

Stefan Eriksson

Uppsala University - Department of Economics

Date Written: March 2000

Abstract

We formulate an efficiency wage model with on-the-job search where wages depend on turnover and employers may use information on whether the searching worker is employed or unemployed as a hiring criterion. We show theoretically that ranking by employment status affects both the level and the persistence of unemployment and numerically that these effects are substantial. More prevalent ranking in Europe compared to the US - because of more rigid wage structures etc. - could potentially help to explain the high and persistent European unemployment.

JEL Classification: E24, J64

Suggested Citation

Gottfries, Nils and Eriksson, Stefan, Ranking of Job Applicants, On-the-Job Search and Persistent Unemployment (March 2000). Available at SSRN: https://ssrn.com/abstract=220316 or http://dx.doi.org/10.2139/ssrn.220316

Nils Gottfries (Contact Author)

Uppsala University - Department of Economics ( email )

Box 513
SE-75120 Uppsala
Sweden
+46 18 471 2304 (Phone)
+46 18 471 1478 (Fax)

HOME PAGE: http://www.nek.uu.se/faculty/gottfries/index.html

CESifo (Center for Economic Studies and Ifo Institute)

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Munich, DE-81679
Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Stefan Eriksson

Uppsala University - Department of Economics ( email )

Box 513
SE-75120 Uppsala
Sweden
+46 18 471 1132 (Phone)
+46 18 471 1478 (Fax)