Job Matching with Multiple-Hiring Firms and Heterogeneous Workers: A Microfoundation
AbstractThe traditional search models that consider coordination failure of firms consisting of single jobs, are inadequate when applied to large firms. In this paper a firm-level matching function is derived for firms with multiple vacancies, by introducing heterogeneity in jobs and workers. Firms face diminishing returns to hiring success, which allows us to determine firm-size endogenously. The derived aggregate matching function exhibits constant returns to scale. The main macroeconomic results of the traditional search models are also shown to survive in this model of large firms. The paper thus provides a microfoundation to the macroeconomic job-matching literature.
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Bibliographic InfoPaper provided by Birkbeck, Department of Economics, Mathematics & Statistics in its series Birkbeck Working Papers in Economics and Finance with number 0514.
Date of creation: Oct 2005
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Find related papers by JEL classification:
- J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
- J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-10-29 (All new papers)
- NEP-DGE-2005-10-29 (Dynamic General Equilibrium)
- NEP-LAB-2005-10-29 (Labour Economics)
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