Labor-market volatility in a matching model with worker heterogeneity and endogenous separations

Andri Chassamboulli

Labour Economics, 2013, vol. 24, issue C, 217-229

Abstract: This paper shows that introducing worker heterogeneity into a standard search and matching model can help increase the volatility of unemployment without violating the tight negative correlation between vacancies and unemployment, i.e., the Beveridge curve. In the model, periods of high job destruction and unemployment correspond with periods of more severe mismatch between the demands of firms and the qualifications of job seekers. A more severe mismatch translates into fewer successful employment matches conditional on the number of contacts per firm and, as a result, into a higher expected recruitment cost per worker hired, with adverse effects on incentives to open vacancies.

Keywords: Search and matching; Endogenous separations; Worker heterogeneity; Unemployment and vacancies volatility (search for similar items in EconPapers)
JEL-codes: E24 E32 J63 J64 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

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Related works:
Working Paper: Labor-market Volatility in a Matching Model with Worker Heterogeneity and Endogenous Separations (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:labeco:v:24:y:2013:i:c:p:217-229

DOI: 10.1016/j.labeco.2013.08.010

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