A Search Model with Job Changing Costs: 'Eurosclerosis' and Unemployment
The paper proposes a framework for studying the effects of job-leaving costs and job-acceptance costs on labor-market transitions. These are incorporated into a general model of on-the-job search with null offers, quitting, and layoffs. It is shown that both types of costs raise the duration of unemployment and the inflow into unemployment as well as reduce the job-to-job mobility. The paper generalizes previous results by looking at a wider class of search models and considering all the individual's transition possibilities. Copyright 1992 by Royal Economic Society.
Volume (Year): 44 (1992)
Issue (Month): 1 (January)
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