Efficiency in a Search and Matching Model with Endogenous Participation

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.

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Year of publication:	2009-02
Authors:	Albrecht, James ; Navarro, Lucas ; Vroman, Susan
Institutions:	ILADES, Facultad de Economía y Negocios
Subject:	search \| matching \| participation \| Hosios rule \| efficiency

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Extent:	application/pdf
Series:	ILADES-Georgetown University Working Papers.
Type of publication:	Book / Working Paper
Notes:	5 pages
Classification:	D3 - Distribution ; J6 - Mobility, Unemployment, and Vacancies
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005673200