Coordination in the Labor Market

Marja-Liisa Halko () and Juha Virrankoski ()
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Marja-Liisa Halko: Department of Accounting and Finance, Aalto University School of Economics
Juha Virrankoski: Department of Economics, University of Turku

No 64, Discussion Papers from Aboa Centre for Economics

Abstract: We solve the equilibrium market structure in a labor market where vacancies and unemployed workers can meet either in an intermediated market where wages are determined by take-it-orleave- it offers, or in a directed search market where firms post wages. By using an intermediary agents avoid the coordination problem which prevails in the search market. We study a monopolistic intermediary and perfect competition between intermediaries, and we consider the welfare properties of an intermediary institution, compared to an economy with an uncoordinated search process only.

Keywords: intermediary; matching; labor market (search for similar items in EconPapers)
JEL-codes: D40 J41 J64 (search for similar items in EconPapers)
Pages: 20
Date: 2011-02
New Economics Papers: this item is included in nep-dge and nep-lab
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