Worker Selection, Hiring, and Vacancies
American Economic Journal: Macroeconomics, 2017, vol. 9, issue 1, 88-127
This paper incorporates worker selection into a random matching model with multi-worker firms. Unlike the standard Diamond-Mortensen-Pissarides (DMP) model, the extended model is compatible with cross-sectional behavior of vacancy yields, which rise with employment growth and worker turnover, but fall with establishment size. Using calibrated versions of the standard and worker selection models, I show that accounting for these patterns has quantitatively important policy implications. I also compare the worker selection and the directed search models. While both models account for these patterns equally well, they differ with regard to labor market policy.
JEL-codes: E24 J23 J63 J64 (search for similar items in EconPapers)
Note: DOI: 10.1257/mac.20140260
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