Firms Hiring Behavior in a Matching Model

Samir Amine

No 6455, EcoMod2014 from EcoMod

Abstract: The object of this article concerns the effect of the exogenous jobs’ complexity on the companies’ behavior regarding the qualification choices. Using a specific comparison model in which workers are vertically differentiated, we are able to demonstrate that in case of a skill-biased technical progress, the increase of jobs’ complexity results in an intensified qualified workers hiring and a reduction of the participation to the labor market.We build a matching model that present the searching behavior of the unemployed and the vertical differentiation of the workers. These are then distinguish by their qualification level which the repartition within this population fallows a linear distribution logic. However, the companies are considered homogeneous and are also offering a unique job. In what concerns the job searching behavior, we use the model of Petrongolo and Pissarides (2001). The meeting process between the companies and the workers are resumed by a constant performance function. For the workers’ productivity, it depends on both the qualification level and the exogenous jobs’ complexity degree. We show that when the technical progress is biased and exogenous, the jobs’ complexity growth increases the minimal qualification required by the companies for the hiring and reduces at the same time the participation on the labor market. In other words, the creation of complex jobs makes the qualified workers more efficient and more productive than the unqualified. Consequently, the companies on the labor market are adapting to this technological biased progress by requiring a higher qualification level for the hiring. That explains the increase of qualification threshold. This phenomenon grows the inequalities between the different categories because the workers that have lower qualification levels than the minimal threshold required by the companies are automatically excluded from the labor market.

Keywords: theoretical framework that applies to developed countries.; Labor market issues; Labor market issues (search for similar items in EconPapers)
Date: 2014-07-03
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