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Ranking of job applicants, on-the-job search, and persistent unemployment

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  • Eriksson, Stefan
  • Gottfries, Nils

Abstract

We formulate an efficiency wage model with on-the-job search where wages depend on turnover and employers may use information on whether the searching worker is employed or unemployed as a hiring criterion. We show theoretically that ranking of job applicants by employment status affects both the level and the persistence of unemployment and numerically that these effects may be substantial. More prevalent ranking in Europe compared to the US (because of more rigid wage structures etc.) could potentially help to explain the high and persistent unemployment in Europe.

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Bibliographic Info

Article provided by Elsevier in its journal Labour Economics.

Volume (Year): 12 (2005)
Issue (Month): 3 (June)
Pages: 407-428

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Handle: RePEc:eee:labeco:v:12:y:2005:i:3:p:407-428

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Citations

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Cited by:
  1. Stefan Eriksson, 2006. "Skill Loss, Ranking of Job Applicants and the Dynamics of Unemployment," German Economic Review, Verein für Socialpolitik, Verein für Socialpolitik, vol. 7, pages 265-296, 08.
  2. Eriksson, Stefan & Lagerström, Jonas, 2004. "Competition between employed and unemployed job applicants: Swedish evidence," Working Paper Series, IFAU - Institute for Evaluation of Labour Market and Education Policy 2004:2, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  3. Burgess, Simon & Turon, Hélène, 2010. "Worker flows, job flows and unemployment in a matching model," European Economic Review, Elsevier, vol. 54(3), pages 393-408, April.
  4. Longhi, Simonetta & Taylor, Mark P., 2013. "Employed and unemployed job seekers and the business cycle," ISER Working Paper Series 2013-02, Institute for Social and Economic Research.
  5. Simon Burgess & Helene Turon, 2005. "The Cyclical Behavior of Equilibrium Unemployment and Vacancies – A Comment," Bristol Economics Discussion Papers 05/573, Department of Economics, University of Bristol, UK.
  6. Mikael Carlsson & Stefan Eriksson & Nils Gottfries, 2006. "Testing Theories of Job Creation: Does Supply Create Its Own Demand?," CESifo Working Paper Series 1866, CESifo Group Munich.
  7. Eriksson, Stefan, 2002. "Imperfect information, wage formation, and the employability of the unemployed," Working Paper Series, IFAU - Institute for Evaluation of Labour Market and Education Policy 2002:17, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  8. Anders Forslund & Nils Gottfries & Andreas Westermark, 2006. "Real and Nominal Wage Adjustment in Open Economies," CESifo Working Paper Series 1649, CESifo Group Munich.
  9. Agell, Jonas & Bennmarker, Helge, 2002. "Wage policy and endogenous wage rigidity: a representative view from the inside," Working Paper Series, IFAU - Institute for Evaluation of Labour Market and Education Policy 2002:12, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  10. Cornelißen, Thomas & Hübler, Olaf & Schneck, Stefan, 2007. "Cyclical Effects on Job-to-Job Mobility: An Aggregated Analysis on Microeconomic Data," Hannover Economic Papers (HEP), Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät dp-371, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
  11. Bruce C. Fallick & Charles A. Fleischman, 2001. "The importance of employer-to-employer flows in the U.S. labor market," Finance and Economics Discussion Series, Board of Governors of the Federal Reserve System (U.S.) 2001-18, Board of Governors of the Federal Reserve System (U.S.).
  12. Bruce Fallick & Charles A. Fleischman, 2004. "Employer-to-employer flows in the U.S. labor market: the complete picture of gross worker flows," Finance and Economics Discussion Series, Board of Governors of the Federal Reserve System (U.S.) 2004-34, Board of Governors of the Federal Reserve System (U.S.).

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