Wage Search Intensity

Silvio Rendon

No 1176, 2019 Meeting Papers from Society for Economic Dynamics

Abstract: In this paper I propose a model of wage-specific search intensity in an environment of random job and on-the-job search. I move on from the usual search intensity setup that increases the arrival rate associated with all possible wage draws. In the proposed framework agents can choose the segments of the wage offer distribution where they want to search more intensively. Compared to the classic search intensity setup, this framework saves agents the effort to search for jobs that are not meant to be accepted or are less attractive because they pay too little or they are to difficult to get. This increase in efficiency implies that total search intensity is lower than in the classic setup. The wage-specific search intensity becomes a displaced and rescaled version of the original wage offer distribution, while hazard rates by current wages are higher than in the classic setup for higher wages. Understandably, the higher the current wages the higher the efficiency gains from having a choice of search intensity by wage levels.

Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed019:1176

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