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Joint-search theory: New opportunities and new frictions

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

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.

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File URL: http://www.sciencedirect.com/science/article/pii/S0304393212000517
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Article provided by Elsevier in its journal Journal of Monetary Economics.

Volume (Year): 59 (2012)
Issue (Month): 4 ()
Pages: 352-369

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Handle: RePEc:eee:moneco:v:59:y:2012:i:4:p:352-369
DOI: 10.1016/j.jmoneco.2012.05.001
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505566

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