Separation costs, job heterogeneity and labor market volatility in the matching model

José Silva and Manuel Toledo

Economics Letters, 2008, vol. 101, issue 1, 77-79

Abstract: This paper extends the standard matching model by introducing a gap in separation costs between entrant and incumbent workers. We show that when this gap is omitted from the model, these costs do not improve the labor market volatility without introducing unrealistic unemployment responses to unemployment benefits.

Keywords: Labor; markets; Matching; Insider-outsider; Separation; costs; Business; cycles (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:101:y:2008:i:1:p:77-79

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