Wage-Directed Job Match with Multiple Applications and Multiple Vacancies: The Optimal Job Application Strategy and Wage Dispersion
AbstractThis paper develops a model of directed-search where workers’ preference for a higher wage is explicitly modelled into their application strategy. In a general setting where jobs offer non-uniform wages and different probabilities of a job offer, the optimal strategy for selecting the set of applied jobs is established. In applying this to a homogeneous-workers job-matching market, the equilibrium outcome is then shown to entail wage dispersion when firms have non-uniform labour demand. Finally a matching function is derived that captures both urnball and multiple-applications frictions, that nests many of the existing functions.
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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 0711.
Date of creation: Sep 2007
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Find related papers by JEL classification:
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- 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-2007-09-30 (All new papers)
- NEP-DGE-2007-09-30 (Dynamic General Equilibrium)
- NEP-LAB-2007-09-30 (Labour Economics)
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