labor market states. In steady-state, we hence have a theory of equilibrium unemployment determined by both matching …

This paper presents a theory explaining the labor market matching process through microeconomic incentives. There are … quit decisions. This approach obviates the need for a matching function. On this theoretical basis, we argue that the … matching function is vulnerable to the Lucas critique. Our calibrated model for the U.S. economy can account for important …

We argue that using wage data alone, it is virtually impossible to identify whether Assortative Matching between worker … and firm types is positive or negative. In standard competitive matching models the wages are determined by the marginal … sorting in the presence of search frictions independent of the sign of the sorting. -- Sorting ; assortative matching …