Efficiency in a Search and Matching Model with Endogenous Participation

James Albrecht (), Lucas Navarro () and Susan Vroman ()
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Lucas Navarro: ILADES-Georgetown University, Universidad Alberto Hurtado, http://www.economia.uahurtado.cl

ILADES-Georgetown University Working Papers from Ilades-Georgetown University, School of Economics and Bussines

Abstract: We show that in a search/matching model with endogenous participation in which workers are heterogeneous with respect to market productivity, satisfying the Hosios rule leads to excessive vacancy creation. The reason is that the marginal worker does not internalize the effect of his or her participation on average productivity.

Keywords: search; matching; participation; Hosios rule; efficiency (search for similar items in EconPapers)
JEL-codes: D3 J6 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dge and nep-lab
Date: Written

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Related works:
Working Paper: Efficiency in a Search and Matching Model with Endogenous Participation (2009)
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