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Joint-search theory: New opportunities and new frictions

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  • Guler, Bulent
  • Guvenen, Fatih
  • Violante, Giovanni L.

Abstract

The job-search problem of couples differs in significant ways from that of singles. We characterize the reservation wage strategies of a couple that perfectly pools income to understand the ramifications of joint search for individual labor market outcomes. Two cases are analyzed. First, when couples are risk averse and pool income, joint search yields new opportunities relative to single-agent search. Second, when spouses receive job offers from multiple locations and incur a cost when living apart, joint search features new frictions and can lead to worse outcomes than single-agent search.

Suggested Citation

  • Guler, Bulent & Guvenen, Fatih & Violante, Giovanni L., 2012. "Joint-search theory: New opportunities and new frictions," Journal of Monetary Economics, Elsevier, vol. 59(4), pages 352-369.
  • Handle: RePEc:eee:moneco:v:59:y:2012:i:4:p:352-369
    DOI: 10.1016/j.jmoneco.2012.05.001
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    More about this item

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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