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
Authors:	Albrecht, James ; Navarro, Lucas ; Vroman, Susan
Publisher:	Bonn : Institute for the Study of Labor (IZA)
Subject:	Arbeitsuche \| Suchtheorie \| Arbeitsangebot \| Arbeitsproduktivität \| Offene Stellen \| Arbeitsplatzsuchmodell \| Theorie \| Search \| matching \| efficiency \| participation \| Hosios rule

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Series:	IZA Discussion Papers ; 4097
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	599048972 [GVK] hdl:10419/35528 [Handle]
Classification:	D8 - Information and Uncertainty ; J6 - Mobility, Unemployment, and Vacancies
Source:	EconStor

Persistent link: https://www.econbiz.de/10010269110