On-the-Job Search in a Matching Model with Heterogeneous Jobs and Workers

44 Pages Posted: 9 Dec 2003

See all articles by Juan Jose Dolado

Juan Jose Dolado

Universidad Carlos III de Madrid - Department of Economics

Marcel Jansen

Charles III University of Madrid - Department of Economics; IZA Institute of Labor Economics

Juan F. Jimeno

Banco de España - Research Department; Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Multiple version iconThere are 2 versions of this paper

Date Written: October 2003

Abstract

This paper considers a matching model with heterogeneous jobs (unskilled and skilled) and workers (low- and high-educated) which allows for on-the-job search by mismatched workers. The latter are high-educated workers who transitorily accept unskilled jobs and continue to search for skilled jobs. Our findings show that on-the-job search introduces an additional source of between- and within-group wage inequality. Furthermore, the higher quit rate of mismatched workers exerts a negative externality on unskilled jobs and weakens the labour market position of low-educated workers. This last feature changes the effects of skill-biased technological change and it alters the response of the labour market to shifts in the skill distribution.

Keywords: Job search, skills, unemployment, wage inequality

JEL Classification: J63, J64

Suggested Citation

Dolado, Juan Jose and Jansen, Marcel and Jimeno, Juan F., On-the-Job Search in a Matching Model with Heterogeneous Jobs and Workers (October 2003). Available at SSRN: https://ssrn.com/abstract=477466

Juan Jose Dolado (Contact Author)

Universidad Carlos III de Madrid - Department of Economics ( email )

HOME PAGE: http://www.eco.uc3m.es/english/staff/

Marcel Jansen

Charles III University of Madrid - Department of Economics ( email )

Calle Madrid 126
Getafe, 28903
Spain
+34 91 624 5740 (Phone)
+34 91 624 9875 (Fax)

IZA Institute of Labor Economics

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

Juan F. Jimeno

Banco de España - Research Department ( email )

Alcala 48
28014 Madrid
Spain

Centre for Economic Policy Research (CEPR)

London
United Kingdom

IZA Institute of Labor Economics

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

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