Efficient Firm Dynamics in a Frictional Labor Market

Leo Kaas and Philipp Kircher

No 2015-09, Working Paper Series of the Department of Economics, University of Konstanz from Department of Economics, University of Konstanz

Abstract: We develop and analyze a labor market model in which heterogeneous firms operate under decreasing returns and compete for labor by posting long-term contracts. Firms achieve faster growth by offering higher lifetime wages, which allows them to fill vacancies with higher probability, consistent with recent empirical findings. The model also captures several other regularities about firm size, job flows and pay, and generates sluggish aggregate dynamics of labor market variables. In contrast to existing bargaining models with large firms, efficiency obtains and the model allows a tractable characterization over the business cycle

Keywords: Labor market search; multi-worker firms; job creation and job destruction (search for similar items in EconPapers)
JEL-codes: E24 J64 L11 (search for similar items in EconPapers)
Pages: 79 pages
Date: 2015-04-21
New Economics Papers: this item is included in nep-bec, nep-dge, nep-lab and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (125)

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Related works:
Journal Article: Efficient Firm Dynamics in a Frictional Labor Market (2015)
Working Paper: Efficient firm dynamics in a frictional labor market (2013)
Working Paper: Efficient Firm Dynamics in a Frictional Labor Market (2011)
Working Paper: Efficient Firm Dynamics in a Frictional Labor Market (2011)
Working Paper: Efficient Firm Dynamics in a Frictional Labor Market (2011)
Working Paper: Efficient Firm Dynamics in a Frictional Labor Market (2010)
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