Efficiency in a Search and Matching Model with Endogenous Participation

James Albrecht, Lucas Navarro and Susan Vroman

No 4097, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We show that in a search/matching model with endogenous participation in which workers are heterogeneous with respect to market productivity, satisfying the Hosios rule leads to excessive vacancy creation. The reason is that the marginal worker does not internalize the effect of his or her participation on average productivity.

Keywords: participation; efficiency; matching; search; Hosios rule (search for similar items in EconPapers)
JEL-codes: D8 J6 (search for similar items in EconPapers)
Pages: 8 pages
Date: 2009-03
New Economics Papers: this item is included in nep-dge and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published - published in: Economics Letters, 2010, 106 (1), 48-50

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Related works:
Journal Article: Efficiency in a search and matching model with endogenous participation (2010)
Working Paper: Efficiency in a Search and Matching Model with Endogenous Participation (2009)
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