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Ranking of Job Applicants, On-the-job Search and Persistent Unemployment

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  • Eriksson, Stefan

    () (Department of Economics)

  • Gottfries, Nils

    () (Department of Economics)

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 by employment status affects both the level and the persistence of unemployment and numerically that these effects are 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 European unemployment.

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Bibliographic Info

Paper provided by Uppsala University, Department of Economics in its series Working Paper Series with number 2000:3.

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Length: 37 pages
Date of creation: 07 Mar 2000
Date of revision:
Publication status: Published in Labour Economics, 2005, pages 407-428.
Handle: RePEc:hhs:uunewp:2000_003

Contact details of provider:
Postal: Department of Economics, Uppsala University, P. O. Box 513, SE-751 20 Uppsala, Sweden
Phone: + 46 18 471 25 00
Fax: + 46 18 471 14 78
Email:
Web page: http://www.nek.uu.se/
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Related research

Keywords: Efficiency wage; Turnover; On-thejob search; Persistence; Ranking; Unemployment; Unions;

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References

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Citations

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Cited by:
  1. 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.).
  2. Agell, Jonas & Bennmarker, Helge, 2002. "Wage Policy and Endogenous Wage Rigidity: A Representative View from the Inside," Research Papers in Economics 2002:12, Stockholm University, Department of Economics.
  3. 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.
  4. 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.
  5. 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.
  6. 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.
  7. Cornelißen, Thomas & Hübler, Olaf & Schneck, Stefan, 2007. "Cyclical Effects on Job-to-Job Mobility: An Aggregated Analysis on Microeconomic Data," Diskussionspapiere der Wirtschaftswissenschaftlichen Fakultät der Leibniz Universität Hannover dp-371, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
  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. Eriksson, Stefan, 2001. "Skill loss, ranking of job applicants, and the dynamics of unemployment," Working Paper Series 2001:4, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  10. repec:ese:iserwp:2013-02 is not listed on IDEAS
  11. 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.).
  12. 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.

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