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Efficiency and specialization: A search theoretic approach

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  • Eleftheriou, Konstantinos

Abstract

An extension of the traditional Roy model to incorporate the existence of search frictions is proposed. The efficiency of model is then tested under the existence of the standard Hosios condition. The results show that a new kind of externality which is related to the degree of job specialization arises and therefore Hosios condition fails to guarantee efficiency. Policies which subsidize employment and aim at job specialization of individuals, will equate the social with the private market outcome.

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Bibliographic Info

Article provided by Elsevier in its journal Economic Modelling.

Volume (Year): 28 (2011)
Issue (Month): 1 ()
Pages: 229-238

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Handle: RePEc:eee:ecmode:v:28:y:2011:i:1:p:229-238

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Web page: http://www.elsevier.com/locate/inca/30411

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Keywords: Efficiency; Search; Skills;

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Cited by:
  1. Stilianos Alexiadis & Konstantinos Eleftheriou & Peter Nijkamp, 2011. "Labor Market Dynamics and Technology Adoption: Theory and Empirical Evidence," Tinbergen Institute Discussion Papers 11-163/3, Tinbergen Institute.
  2. Alexiadis, Stilianos & Eleftheriou, Konstantinos & Nijkamp, Peter, 2013. "Technology adoption within a search model: Evidence from OECD countries," Economic Modelling, Elsevier, vol. 33(C), pages 137-148.

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