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Search Capital

Carlos Carrillo-Tudela () and Eric Smith ()

No 2015-41, Working Papers from Peruvian Economic Association

Abstract: This paper studies an environment in which workers accumulate information about employment contacts made while searching on-the-job. Workers use this search capital to improve wages and insure against job destruction. This behaviour generates voluntary and involuntary job-to-job transitions with both wage hikes and wage cuts. The equilibrium wage distribution becomes less disperse than when workers cannot recall previously met job opportunities. The impact on output depends on depreciation and the extent of on-the-job search, among other factors. If search capital does not depreciate too quickly, the insurance benefits outweigh rent seeking costs and total output is higher with search capital.

Keywords: Search Capital; Turnover; Wage Cuts (search for similar items in EconPapers)
JEL-codes: J62 J63 J64 (search for similar items in EconPapers)
Date: 2015-04
New Economics Papers: this item is included in nep-dge and nep-lab
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Related works:
Journal Article: Search Capital (2017) Downloads
Working Paper: Search Capital (2015) Downloads
Working Paper: Search Capital (2012) Downloads
Working Paper: Search Capital (2012) Downloads
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