Search-Theoretic Models of the Labor Market: A Survey

76 Pages Posted: 11 Nov 2002

See all articles by Richard Rogerson

Richard Rogerson

Arizona State University (ASU) - Economics Department; National Bureau of Economic Research (NBER); Princeton University - Woodrow Wilson School of Public and International Affairs

Randall Wright

University of Wisconsin - Madison - Department of Finance, Investment and Banking; Federal Reserve Banks - Federal Reserve Bank of Minneapolis

Multiple version iconThere are 2 versions of this paper

Date Written: October 2002

Abstract

This essay provides a survey of various models that use search theory to analyze labor markets. By search theory, we mean a framework in which trading frictions are modeled explicitly. Search models generate unemployment as an equilibrium outcome, and also allow us to discuss various ways in which wages and other prices are determined by agents in the model. We present the basic single-agent search problem in a variety of different forms. We describe the endogenous determination of the wage distribution. We present some simple equilibrium models of the labor market and discuss some machinery that is common in such models, including the notion of a matching technology, as well as basic bargaining theory. We present a version that is designed explicitly to analyze job creation and destruction.

Suggested Citation

Rogerson, Richard and Wright, Randall D., Search-Theoretic Models of the Labor Market: A Survey (October 2002). PIER Working Paper No. 02-041. Available at SSRN: https://ssrn.com/abstract=341660 or http://dx.doi.org/10.2139/ssrn.341660

Richard Rogerson

Arizona State University (ASU) - Economics Department ( email )

Tempe, AZ 85287-3806
United States
480-727-6671 (Phone)
602-965-0748 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Princeton University - Woodrow Wilson School of Public and International Affairs ( email )

Princeton University
Princeton, NJ 08544-1021
United States

Randall D. Wright (Contact Author)

University of Wisconsin - Madison - Department of Finance, Investment and Banking ( email )

975 University Avenue
Madison, WI 53706
United States
608-263-3860 (Phone)

Federal Reserve Banks - Federal Reserve Bank of Minneapolis

90 Hennepin Avenue
Minneapolis, MN 55480
United States

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