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:	2009-03
Authors:	Albrecht, James ; Navarro, Lucas ; Vroman, Susan
Institutions:	Institute for the Study of Labor (IZA)
Subject:	participation \| efficiency \| matching \| search \| Hosios rule

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Extent:	application/pdf
Series:	IZA Discussion Papers.
Type of publication:	Book / Working Paper
Language:	English
Notes:	published in: Economics Letters, 2010, 106 (1), 48-50 Number 4097 2010 pages
Classification:	D8 - Information and Uncertainty ; J6 - Mobility, Unemployment, and Vacancies
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005822510