In a matching model of the labour market in which employers and job seekers have to engage in a costly serach process to create a match, we show that on-the-job search ceteris paribus reduces the unemployment outflow rate. We derive this result for two alternative assumptions as to the relative search effectiveness of on-the-job searchers aare perfectly substituable and second, that employers rank employed above unemplyed applicants.
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Paper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number
99199.