Changing Workerfs States and Inefficient Decisions on Turnover
AbstractThis paper considers an on-the-job search model that includes wage bargaining and employer-employee mismatch. There are two states of workers in relationship to their fit for a particular job, good match versus bad match (mismatch). These states change in accordance with a stochastic process. There are two main results; the first is that the turnover level that workers find optimal is lower than the socially optimal level. The second is that the level of the firmfs entry is not optimal even though the Hosios condition is hold. The first result is clearly distinct from previous studies.
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Bibliographic InfoPaper provided by Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP) in its series Discussion Papers in Economics and Business with number 09-37.
Length: 34 pages
Date of creation: Nov 2009
Date of revision:
on-the-job search; wage bargaining; mismatch; turnover;
Find related papers by JEL classification:
- J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
- J81 - Labor and Demographic Economics - - Labor Standards - - - Working Conditions
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-11-27 (All new papers)
- NEP-DGE-2009-11-27 (Dynamic General Equilibrium)
- NEP-LAB-2009-11-27 (Labour Economics)
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