Intermediary Organizations in Labor Markets

Takayuki Oishi, Jun Tomioka and Shin Sakaue

No e124, Working Papers from Tokyo Center for Economic Research

Abstract: We propose a job matching model of intermediary labor markets by developing the seminal work of Kelso and Crawford (1982, Econometrica 50:1483-1504). Using this model, we show that for an arbitrary fixed broker-fee rate, the salary-adjustment process converges to a core allocation in intermediary labor markets where high-skilled workers are matched to high-technology firms by the private middleman and low-skilled workers are matched to low-technology firms by the public middleman. This result means that the dual labor market is emerged as a stable outcome of job-matching promoted by the private and public middlemen. Finally, we discuss empirical relevance of our theoretical model by using the data of job placement services in Japan.

Pages: 29 pages
Date: 2018-03
New Economics Papers: this item is included in nep-des and nep-knm
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