On-the-Job Search and Sorting
Tinbergen Institute Discussion Paper No. 2005-070/3
44 Pages Posted: 24 Nov 2005
There are 3 versions of this paper
On-the-Job Search and Sorting
On-the-Job Search and Sorting
On-the-Job Search and Sorting
Date Written: May 2005
Abstract
We characterize the equilibrium of a search model with a continuum of job and worker types, wage bargaining, free entry of vacancies and on-the-job search. Although on-the-job search reduces the output loss due to frictions, it increases the wage differentials. The decentralized economy with monopsonistic wage setting yields too many vacancies and hence too low unemployment compared to first best, due to a business-stealing externality. Raising workers' bargaining power resolves this inefficiency. Unemployment benefits are a second best alternative to this policy.
Keywords: assignment, on-the-job search, wage bargaining, sorting
JEL Classification: E24, J21, J23
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Identifying Sorting - In Theory
By Jan Eeckhout and Philipp Kircher
-
Identifying Sorting: In Theory
By Jan Eeckhout and Philipp Kircher
-
An Empirical Assessment of Assortative Matching in the Labor Market
By Rute Mendes, Gerard J. Van Den Berg, ...
-
By Pieter A. Gautier, Coen N. Teulings, ...
-
By Coen N. Teulings, Pieter A. Gautier, ...
-
An Empirical Model of Wage Dispersion with Sorting
By Jesper Bagger and Rasmus Lentz
-
Identification of Search Models with Initial Condition Problems
By Gadi Barlevy and H.n. Nagaraja