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A Search Model with a Quasi-Network

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  • João Miguel Ejarque

    (Department of Economics, University of Copenhagen)

Abstract

This paper adds a quasi-network to a search model of the labor market. Fitting the model to an average unemployment rate and to other moments in the data implies the presence of the network is not noticeable in the basic properties of the unemployment and job finding rates. However, the network creates downward sloping reemployment hazards which the basic model does not, and under increasing network returns these hazards are significantly convex as we see in the data. Going into more detail we find that the network gets partially destroyed in periods of high unemployment and generates less job creation per link, while at the same time the jobs it does create, it does so with fewer links.

Suggested Citation

  • João Miguel Ejarque, 2009. "A Search Model with a Quasi-Network," Discussion Papers 10-23, University of Copenhagen. Department of Economics, revised Sep 2010.
    • Handle: RePEc:kud:kuiedp:1023
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    References listed on IDEAS

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    More about this item

    Keywords

    duration; networks; search; unemployment;
    All these keywords.

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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