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Efficiency in a Search and Matching Model with Endogenous Participation

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Author Info
Albrecht, James () (Georgetown University)
Navarro, Lucas () (Universidad Alberto Hurtado)
Vroman, Susan () (Georgetown University)

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Abstract

We show that in a search/matching model with endogenous participation in which workers are heterogeneous with respect to market productivity, satisfying the Hosios rule leads to excessive vacancy creation. The reason is that the marginal worker does not internalize the effect of his or her participation on average productivity.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4097.

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Length: 8 pages
Date of creation: Mar 2009
Date of revision:
Handle: RePEc:iza:izadps:dp4097

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Related research
Keywords: search; matching; efficiency; participation; Hosios rule;

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Find related papers by JEL classification:
D8 - Microeconomics - - Information, Knowledge, and Uncertainty
J6 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies

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This page was last updated on 2009-11-23.

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