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

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  • Eriksson, Stefan

    ()
    (IFAU - Office of Labour Market Policy Evaluation)

  • Gottfries, Nils

    ()
    (IFAU - Office of Labour Market Policy Evaluation)

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

Paper provided by IFAU - Institute for Evaluation of Labour Market and Education Policy in its series Working Paper Series with number 2000:8.

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Length: 33 pages
Date of creation: 09 Oct 2000
Date of revision:
Publication status: Published in Labour Economics, 2005, pages 407-428.
Handle: RePEc:hhs:ifauwp:2000_008

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Keywords: Efficiency wage; Turnover; On-the-job search; Labor mobility; Persistence; Ranking; Unemployment;

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References

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Citations

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Cited by:
  1. Stefan Eriksson & Jonas Lagerström, 2006. "Competition between Employed and Unemployed Job Applicants: Swedish Evidence," Scandinavian Journal of Economics, Wiley Blackwell, vol. 108(3), pages 373-396, October.
  2. Agell, Jonas & Bennmarker, Helge, 2002. "Wage policy and endogenous wage rigidity: a representative view from the inside," Working Paper Series 2002:12, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  3. Carlsson, Mikael & Eriksson, Stefan & Gottfries, Nils, 2006. "Testing Theories of Job Creation: Does Supply Create Its Own Demand?," IZA Discussion Papers 2024, Institute for the Study of Labor (IZA).
  4. Simon Burgess & Helene Turon, 2005. "Worker Flows, Job Flows and Unemployment in a Matching Model," Bristol Economics Discussion Papers 05/572, Department of Economics, University of Bristol, UK.
  5. Eriksson, Stefan, 2002. "Imperfect information, wage formation, and the employability of the unemployed," Working Paper Series 2002:17, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  6. 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.
  7. Stefan Eriksson, 2006. "Skill Loss, Ranking of Job Applicants and the Dynamics of Unemployment," German Economic Review, Verein für Socialpolitik, vol. 7, pages 265-296, 08.
  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. 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 2004-34, Board of Governors of the Federal Reserve System (U.S.).
  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) dp-371, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
  11. repec:ese:iserwp:2013-02 is not listed on IDEAS
  12. 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 2001-18, Board of Governors of the Federal Reserve System (U.S.).

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