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A Model of Job and Worker Flows

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  • Ricardo Lagos
  • Nobuhiro Kiyotaki

Abstract

We develop a model of gross job and worker flows and use it to study how the wages and employment status of individual workers evolve over time and how they are affected by aggregate labor market conditions. We also examine the effects that labor market institutions and public policy have on the gross flows, as well as on the resulting wage distribution, employment and aggregate output in the equilibrium. The model we propose also rationalizes various other features of labor markets. For example, why do displaced workers tend to experience a significant and persistent fall in wages? Why do workers stay unemployed when on-the-job-search is at least as effective as off-the-job-search? Why is it that good jobs are not only better paid, but often also more stable? From a theoretical point of view, we study the extent to which the competitive equilibrium achieves an efficient allocation of resources

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Bibliographic Info

Paper provided by Society for Economic Dynamics in its series 2004 Meeting Papers with number 36.

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Date of creation: 2004
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Handle: RePEc:red:sed004:36

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Keywords: on-the-job search; turnover;

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References

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Citations

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Cited by:
  1. Shintaro Yamaguchi, 2009. "Job Search, Bargaining, and Wage Dynamics," Global COE Hi-Stat Discussion Paper Series, Institute of Economic Research, Hitotsubashi University gd08-026, Institute of Economic Research, Hitotsubashi University.
  2. Davis, Steven J. & Faberman, R. Jason & Haltiwanger, John C., 2005. "The Flow Approach to Labor Markets: New Data Sources, Micro-Macro Links and the Recent Downturn," IZA Discussion Papers 1639, Institute for the Study of Labor (IZA).
  3. Giovanni L. Violante & Per Krusell & Andreas Hornstein, 2006. "Frictional wage dispersion in search models: a quantitative assessment," Working Paper, Federal Reserve Bank of Richmond 06-07, Federal Reserve Bank of Richmond.
  4. Ricardo Lagos & Guillaume Rocheteau, 2008. "Liquidity in asset markets with search frictions," Staff Report, Federal Reserve Bank of Minneapolis 408, Federal Reserve Bank of Minneapolis.
  5. Spiros Bougheas & Carl Davidson & Richard Upward & Peter Wright, . "Structural Adjustment, Turnover and Career Mobility," Discussion Papers 08/23, University of Nottingham, GEP.
  6. Nicolas L. Jacquet, 2007. "Inefficient Worker Turnover," Labor Economics Working Papers 22450, East Asian Bureau of Economic Research.
  7. Keisuke Kawata, 2013. "Work Hour Mismatch and On-the-job Search," IDEC DP2 Series 3-6, Hiroshima University, Graduate School for International Development and Cooperation (IDEC).

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