A discrete choice approach to labor market matching

Joern Kleinert ()
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Joern Kleinert: University of Graz, Austria

No 2026-16, Graz Economics Papers from University of Graz, Department of Economics

Abstract: A match in the labor market results from a two-sided discrete choice of workers and firms. On the one side, heterogeneous workers choose to apply to firms' offers which correspond well to their abilities, education, training (all closely related to job seeker's occupation), interests, and job expectations. On the other side, heterogeneous firms choose from applications received their employees depending on their occupation or work experience, special skills, and expected fit into the existing team. Each side makes discrete choices. In this way, I model labor market search and matching with mismatches as one possible result. Labor market outcomes are thereby strongly affected by non-labor market influences, such as education decisions and sector shifts in the goods market.

Keywords: Labor market matching; Wages; Occupational differentiation (search for similar items in EconPapers)
JEL-codes: J24 J31 J64 (search for similar items in EconPapers)
Date: 2026-08
New Economics Papers: this item is included in nep-dcm and nep-lma
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