Search and the Efficient Assignment of Workers to Jobs
In a model in which different types of workers form matches with different types of employers, a method of calculating opportunity costs of workers and jobs is derived. These are shown to differ systematically from the reservation wages and profits used by workers and employers to determine whether matches should be formed. Ex ante differences among workers and among jobs then generate externalities in the labor market, resulting in inefficient assignments of workers to jobs and multiple equilibria. Intervention in the labor market, by altering the assignment, can increase aggregate output but may cause regressive redistribution. Copyright 1995 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.
Volume (Year): 36 (1995)
Issue (Month): 2 (May)
|Contact details of provider:|| Postal: |
Phone: (215) 898-8487
Fax: (215) 573-2057
Web page: http://www.econ.upenn.edu/ier
More information through EDIRC
|Order Information:|| Web: http://www.blackwellpublishing.com/subs.asp?ref=0020-6598 Email: |
When requesting a correction, please mention this item's handle: RePEc:ier:iecrev:v:36:y:1995:i:2:p:283-302. See general information about how to correct material in RePEc.
If references are entirely missing, you can add them using this form.