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

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.

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Year of publication:	2011-02
Authors:	Gavrel, Frédéric
Institutions:	Centre de Recherche en Économie et Management (CREM)
Subject:	Matching \| Differentiation of skills \| Applicant ranking \| Labor market \| efficiency

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Extent:	application/pdf
Series:	Economics Working Paper Archive (University of Rennes 1 & University of Caen).
Type of publication:	Book / Working Paper
Language:	English
Classification:	D8 - Information and Uncertainty ; J6 - Mobility, Unemployment, and Vacancies
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10009293461