On-the-Job Search in a Matching Model with Heterogeneous Jobs and Workers
44 Pages Posted: 9 Dec 2003
There are 2 versions of this paper
On the Job Search in a Matching Model with Heterogeneous Jobs and Workers
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: Suggested Citation
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