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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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Phone: (+46) 18 - 471 70 70
Fax: (+46) 18 - 471 70 71
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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. 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.
  2. Carlsson, Mikael & Eriksson, Stefan & Gottfries, Nils, 2006. "Testing Theories of Job Creation: Does Supply Create Its Own Demand?," Working Paper Series 2006:7, Uppsala University, Department of Economics, revised 23 Oct 2008.
  3. 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.
  4. repec:ese:iserwp:2013-02 is not listed on IDEAS
  5. Eriksson, Stefan & Lagerström, Jonas, 2004. "Competition between employed and unemployed job applicants: Swedish evidence," Working Paper Series 2004:2, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  6. Anders Forslund & Nils Gottfries & Andreas Westermark, 2006. "Real and Nominal Wage Adjustment in Open Economies," CESifo Working Paper Series 1649, CESifo Group Munich.
  7. 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.
  8. 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.
  9. 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.
  10. 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.).
  11. 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.
  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 2004-34, Board of Governors of the Federal Reserve System (U.S.).

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