Directed search and job rotation

Fei Li () and Can Tian

Journal of Economic Theory, 2013, vol. 148, issue 3, 1268-1281

Abstract: We consider the impact of job rotation in a directed search model in which firm sizes are endogenously determined and match quality is initially unknown. A large firm benefits from the opportunity to rotate workers so as to partially overcome the loss of mismatch. As a result, in the unique symmetric equilibrium, large firms have higher labor productivity and lower separation rates. In contrast to the standard directed search model with multi-vacancy firms, this model can generate a positive correlation between firm size and wage without introducing any ex ante productivity differences or imposing any non-concave production function assumptions.

Keywords: Directed search; Job rotation; Firm size and wage; Firm size and labor productivity (search for similar items in EconPapers)
JEL-codes: J31 J64 L11 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Working Paper: Directed Search and Job Rotation (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:148:y:2013:i:3:p:1268-1281

DOI: 10.1016/j.jet.2012.10.004

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