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The Welfare Consequences Of A Quantitative Search And Matching Approach To The Labor Market

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  • Masanori Kashiwagi

Abstract

This paper explores the quantitative impact on welfare of different parametric assumptions about bargaining power in a standard search and matching model of the labor market. This study computes the welfare loss if social efficiency is not attained and finds that, for a broad range of bargaining power, the welfare loss is less than 1 percent of the social optimum. This paper also investigates which aspects of the parameterization are important for welfare consequences. Further, I investigate how the welfare consequences are altered in the presence of a fixed matching cost and increasing returns to scale in the matching function.

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  • Masanori Kashiwagi, 2018. "The Welfare Consequences Of A Quantitative Search And Matching Approach To The Labor Market," Bulletin of Economic Research, Wiley Blackwell, vol. 70(4), pages 423-442, October.
    • Handle: RePEc:bla:buecrs:v:70:y:2018:i:4:p:423-442
    DOI: 10.1111/boer.12160
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