Partially Directed Search in the Labor Market

Liangjie Wu

No 2117, EIEF Working Papers Series from Einaudi Institute for Economics and Finance (EIEF)

Abstract: I study the labor market implications of limited information inherent in the job search process. Workers pay a cost to direct job search that is proportional to the divergence between the chosen search strategy and a benchmark random search strategy. With this cost, workers apply to every job with a positive probability, but apply to high-payoff jobs with higher probabilities. In a wage posting model with partially directed search, employers have monopsony power: firms extract a markdown due to the cost of directing search. Efficiency of the market equilibrium depends on whether the markdowns are equally distributed across firms. Inefficiency arises when search cost is intermediate, which has new implications on policy remedies to monopsony.

Pages: 105 pages
Date: 2021, Revised 2021-12
New Economics Papers: this item is included in nep-lab
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.eief.it/eief/images/WP_21.17.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eie:wpaper:2117

Access Statistics for this paper

More papers in EIEF Working Papers Series from Einaudi Institute for Economics and Finance (EIEF) Contact information at EDIRC.
Bibliographic data for series maintained by Facundo Piguillem ().