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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. Ricardo Lagos & Guillaume Rocheteau, 2008. "Liquidity in asset markets with search frictions," Staff Report 408, Federal Reserve Bank of Minneapolis.
  2. Nicolas L. Jacquet, 2007. "Inefficient Worker Turnover," Labor Economics Working Papers 22450, East Asian Bureau of Economic Research.
  3. Shintaro Yamaguchi, 2007. "Job Search, Bargaining, and Wage Dynamics," Department of Economics Working Papers 2007-03, McMaster University.
  4. Andreas Hornstein & Per Krusell & Giovanni L. Violante, 2007. "Frictional Wage Dispersion in Search Models: A Quantitative Assessment," NBER Working Papers 13674, National Bureau of Economic Research, Inc.
  5. 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).
  6. 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).
  7. Spiros Bougheas & Carl Davidson & Richard Upward & Peter Wright, . "Structural Adjustment, Turnover and Career Mobility," Discussion Papers 08/23, University of Nottingham, GEP.

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