EconPapers    
Economics at your fingertips  
 

On-The-Job Search and Sorting

Pieter Gautier (), C. N. Teulings () and Aico van Vuuren ()

No 1687, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We characterize the equilibrium of a search model with a continuum of job and worker types, wage bargaining, free entry of vacancies and on-the-job search. The decentralized economy with monopsonistic wage setting yields too many vacancies and hence too low unemployment compared to first best. This is due to a business-stealing externality. Raising workers' bargaining power resolves this inefficiency. Unemployment benefits are a second best alternative to this policy. We establish simple relations between the losses in production due to search frictions and wage differentials on the one hand and unemployment on the other hand. Both can be used for empirical testing.

Keywords: optimal UI benefits; assignment; efficiency; on-the-job search; search frictions (search for similar items in EconPapers)
JEL-codes: J3 J6 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dge and nep-lab
Date: 2005-07
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9) Track citations by RSS feed

Published as "On-the-job search, mismatch and efficiency" in: Review of Economic Studies, 2010, 77 (1), 245-272

Downloads: (external link)
http://ftp.iza.org/dp1687.pdf (application/pdf)

Related works:
Working Paper: On-the-Job Search and Sorting (2006) Downloads
Working Paper: On-the-Job Search and Sorting (2005) Downloads
Working Paper: On-the-Job Search and Sorting (2005) Downloads
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:iza:izadps:dp1687

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().

 
Page updated 2019-10-12
Handle: RePEc:iza:izadps:dp1687