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Job Hoarding

Author

Listed:
  • Matthew J. Baker
  • Ingmar Nyman

Abstract

We study a labor market in which employers and workers search for a trading partner, and workers have private information about the value of a match. We show that competitive pressure can induce workers to take jobs for which they are ill suited. This leads to insufficient frictional unemployment and search, and lower average productivity and utility. A fully tax-financed unemployment benefit can eliminate the inefficiency. Moreover, because inefficient job hoarding by workers occurs when there are many workers per job, the analysis suggests a novel explanation for the stylized macroeconomic fact that labor productivity is procyclical.

Suggested Citation

  • Matthew J. Baker & Ingmar Nyman, 2017. "Job Hoarding," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 173(4), pages 688-722, December.
    • Handle: RePEc:mhr:jinste:urn:sici:0932-4569(201712)173:4_688:jh_2.0.tx_2-
    DOI: 10.1628/093245617X14860182052051
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    More about this item

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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