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Ranking of Job Applicants, On-the-Job Search and Persistent Unemployment

  • Eriksson, S.
  • Gottfries, N.

We formulate an efficiency wage model with on-the-job search where wages depend on turnover and employers may use information on whether the searching worker is employed or unemployed as a hiring criterion. We show theoretically that ranking by employment status affects both the level and the persistence of unemployment and numerically that these effects are substantial. More prevalent ranking in Europe compared to the US -because of more rigid wage structures etc. - could potentially help to exp lain the high and persistent European unemployment.

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Paper provided by Uppsala - Working Paper Series in its series Papers with number 2000:3.

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Length: 37 pages
Date of creation: 2000
Date of revision:
Handle: RePEc:fth:uppaal:2000:3
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UPPSALA UNIVERSITY, DEPARTMENT OF ECONOMICS, S-751 20 UPPSALA SWEDEN.

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Fax: + 46 18 471 14 78
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