On the Inefficiency of Matching Models of Unemployment with Heterogeneous Workers and Jobs when Firms Rank their Applicants

Frédéric Gavrel

Economics Working Paper Archive (University of Rennes & University of Caen) from Center for Research in Economics and Management (CREM), University of Rennes, University of Caen and CNRS

Abstract: In a circular matching model, firms rank their applicants and pick the best suited one. Job creation appears to lower the average output. As firms do not internalize this effect, jobs are too many in the laissez-faire equilibrium under the Hosios condition. Due to similar externalities firms' search intensities are too strong whereas workers' search intensities are too weak.

Keywords: Matching; Differentiation of skills; Applicant ranking; Labor market; efficiency (search for similar items in EconPapers)
JEL-codes: D8 J6 (search for similar items in EconPapers)
Date: 2011-02
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 (2)

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Related works:
Journal Article: On the inefficiency of matching models of unemployment with heterogeneous workers and jobs when firms rank their applicants (2012)
Working Paper: On the inefficiency of matching models of unemployment with heterogeneous workers and jobs when firms rank their applicants (2012)
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