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A model of globalization and firm-worker matching: How good is good enough?

Listed author(s):
  • Davidson, Carl
  • Matusz, Steven J.

More able workers are more productive than less able workers, but their outside opportunities also allow them to command a higher wage. As a result, it is not clear which workers firms will prefer to hire. Moreover, with worker heterogeneity and labor market frictions, firms may not always get their first choice of worker. We investigate circumstances under which the second best is good enough, and show how globalization can either narrow or broaden the conditions under which second best is acceptable.

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File URL: http://www.sciencedirect.com/science/article/pii/S1059056011001158
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Article provided by Elsevier in its journal International Review of Economics & Finance.

Volume (Year): 23 (2012)
Issue (Month): C ()
Pages: 5-15

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Handle: RePEc:eee:reveco:v:23:y:2012:i:c:p:5-15
DOI: 10.1016/j.iref.2011.10.002
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/620165

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  1. Giovanni Maggi & Gene M. Grossman, 2000. "Diversity and Trade," American Economic Review, American Economic Association, vol. 90(5), pages 1255-1275, December.
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  8. Mortensen, Dale & Pissarides, Christopher, 2011. "Job Creation and Job Destruction in the Theory of Unemployment," Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 1, pages 1-19.
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  10. Dale T. Mortensen, 1982. "The Matching Process as a Noncooperative Bargaining Game," NBER Chapters,in: The Economics of Information and Uncertainty, pages 233-258 National Bureau of Economic Research, Inc.
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  12. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
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  14. Yeaple, Stephen Ross, 2005. "A simple model of firm heterogeneity, international trade, and wages," Journal of International Economics, Elsevier, vol. 65(1), pages 1-20, January.
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  26. repec:hrv:faseco:4784031 is not listed on IDEAS
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