Essays in search and matching
The first chapter investigates the efficiency of workers' mobility decision in an equilibrium search model where homogeneous and risk neutral workers learn about their productivity in a particular job as their tenure increases, as in Jovanovic (1984). The two crucial additional assumptions are; jobs are ex ante heterogeneous, and wages are determined by ex post bargaining. The main finding of this paper is that mobility decisions are inefficient in that workers' reservation types, i.e., the minimum productivity a firm must have to be able to poach away the worker from his current job, are too high. The reason for this mobility inefficiency lies in the wage setting mechanism. I then show that an appropriate level of unemployment insurance can induce the workers to take efficient mobility decisions, and therefore is output enhancing. This result is obtained despite the higher unemployment rate resulting from the higher rate of turnover and the higher risk of unemployment associated with it. The second chapter builds on the search/matching literature but extends it by endogenizing the market structure. This is in contrast with standard (random) search models, which implicitly assume that all agents are searching randomly in one meeting place. When the population is ex ante heterogeneous, as in this model, the one meeting place assumption is no longer innocuous: an agent meets with other agents he will never match with, and who impose a negative externality on his search. When there exists infinitely many meeting places, we find that all equilibria only have a finite number of active meeting places. Further, it is possible to obtain market structures with no search externality. We then endogenize the market structure via a pre-frictions stage where agents cooperatively decide on which of the steady-state market structures to implement. We consider two notions of stability: weak and strong stability. Weakly stable equilibria are shown to always exist, but strongly stable equilibria do not always exist. Our main finding is that only equilibria where all agents match with the first person they meet in their respective meeting places can be stable, and these are efficient.
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|Authors:||Jacquet, Nicolas Laurent|
|Type of publication:||Other|
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