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On-the-Job Search and Sorting

Pieter Gautier (), Coen N. Teulings () and Aico van Vuuren ()
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Coen N. Teulings: SEO Economic Research, University of Amsterdam

No 05-070/3, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: This paper characterizes the equilibrium for a large class of search models with two-sided heterogeneity and on-the-job search. Besides the well-known congestion externalities, we show that on-the-job search in combination with monopsonistic wage setting without commitment creates a "business-stealing" externality. In the absence of congestion effects, this leads to excessive vacancy creation. Under wage setting with commitment this externality is absent because when posting a wage, firms take into account the expected productivity of future workers in their current jobs. If firms are able to make and respond to counteroffers, then they will not have to pay no-quit premia and this also leads to excessive vacancy creation. See also 'On-The-Job Search, Mismatch and Efficiency' , 'Review of Economic Studies', 77(1), 245-72.

Keywords: assignment; on-the job search; wage bargaining; sorting (search for similar items in EconPapers)
JEL-codes: E24 J21 J23 (search for similar items in EconPapers)
Date: 2005-06-24
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https://papers.tinbergen.nl/05070.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
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