The market for job placement : a model of headhunters
This paper deals with the consequences of the existence of private employment agencies on the labor market. Using a matching framework, we study the conditions of existence of private employment agencies and the consequences of competition on the market for job placement. We show that the private employment agencies enter in the labour market only if they are much more efficient than the private agency. Moreover, the level of the unemployment benefits is a disincentive to manage workers for the private agency. Because of a high fallback position for the worker, it is costly for the private employment agency to manage a worker having some low probabilities to exit from unemployment. If these conditions are satisfied, the existence of private employment agencies improve the labor market through shorter unemployment spells and a lower unemployment rate. Moreover, an improvement in the matching process is an incentive for the firms to post vacancies at the private agencies. Nevertheless, the workers managed by the private agencies receive some lower wages than the other workers because of the payment by the firm for recruiting a worker. Finally, we show that private employment agencies have a natural disincentive to manage unskilled workers. But, the introduction of a subsidy to match an unskilled worker with a vacancy seems to be a sufficient incentive to make the private employment agencies managing unskilled workers.
|Date of creation:||2006|
|Publication status:||Published in Cahiers de la Maison des Sciences Economiques 2006.27 - ISSN 1624-0340. 2006|
|Note:||View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00113476|
|Contact details of provider:|| Web page: https://hal.archives-ouvertes.fr/|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- BÃ¶heim, RenÃ© & Taylor, Mark P., 2001.
"Job search methods, intensity and success in Britain in the 1990s,"
ISER Working Paper Series
2001-07, Institute for Social and Economic Research.
- René Böheim & Mark P Taylor, 2002. "Job search methods, intensity and success in Britain in the 1990s," Economics working papers 2002-06, Department of Economics, Johannes Kepler University Linz, Austria.
- Petrongolo, Barbara & Pissarides, Christopher, 2000.
"Looking Into The Black Box: A Survey Of The Matching Function,"
CEPR Discussion Papers
2409, C.E.P.R. Discussion Papers.
- Christopher A. Pissarides & Barbara Petrongolo, 2001. "Looking into the Black Box: A Survey of the Matching Function," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 390-431, June.
- Barbara Petrongolo & Christopher A. Pissarides, 2000. "Looking Into the Black Box: A Survey of the Matching Function," CEP Discussion Papers dp0470, Centre for Economic Performance, LSE.
- Barbara Petrongolo & Christopher Pissarides, 2000. "Looking into the black box: a survey of the matching function," LSE Research Online Documents on Economics 2122, London School of Economics and Political Science, LSE Library.
- Osberg, L., 1989.
"Fishing In Different Pools: Job Search Strategies And Job-Finding Success In Canada In The Early 1980s,"
Department of Economics at Dalhousie University working papers archive
89-03, Dalhousie, Department of Economics.
- Osberg, Lars, 1993. "Fishing in Different Pools: Job Search Strategies and Job-Finding Success in Canada in the Early 1980s," Journal of Labor Economics, University of Chicago Press, vol. 11(2), pages 348-386, April.
- Addison, John T. & Portugal, Pedro, 1998.
"Job Search Methods and Outcomes,"
ZEW Discussion Papers
98-41, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Neugart, Michael & Storrie, Donald, 2002.
"Temporary work agencies and equilibrium unemployment,"
Discussion Papers, Research Unit: Labor Market Policy and Employment
FS I 02-203, Social Science Research Center Berlin (WZB).
- Neugart, Michael & Storrie, Donald, 2002. "Temporary work agencies and equilibrium unemployment," Working Papers in Economics 83, University of Gothenburg, Department of Economics.
- Yavas, Abdullah, 1994. "Middlemen in Bilateral Search Markets," Journal of Labor Economics, University of Chicago Press, vol. 12(3), pages 406-429, July.
- P. Diamond, 1980.
"Mobility Costs, Frictional Unemployment and Efficiency,"
257, Massachusetts Institute of Technology (MIT), Department of Economics.
- Diamond, Peter A, 1981. "Mobility Costs, Frictional Unemployment, and Efficiency," Journal of Political Economy, University of Chicago Press, vol. 89(4), pages 798-812, August.
- Blau, David M & Robins, Philip K, 1990. "Job Search Outcomes for the Employed and Unemployed," Journal of Political Economy, University of Chicago Press, vol. 98(3), pages 637-655, June.
- Lindeboom, Maarten & van Ours, Jan C & Renes, Gusta, 1994.
"Matching Employers and Workers: An Empirical Analysis on the Effectiveness of Search,"
Oxford Economic Papers,
Oxford University Press, vol. 46(1), pages 45-67, January.
- van Ours, J.C. & Lindeboom, M. & Renes, G., 1994. "Matching employers and workers : An empirical analysis on the effectiveness of search," Other publications TiSEM 3ada67c1-145c-42d0-8726-f, Tilburg University, School of Economics and Management.
- Lindeboom, M. & Ours, J.C. & Renes, G., 1991. "Matching employers and workers : an empirical analysis on the effectiveness of search," Serie Research Memoranda 0063, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
- Harry J. Holzer, 1986.
"Search Method Use by Unemployed Youth,"
NBER Working Papers
1859, National Bureau of Economic Research, Inc.
- Dolado, Juan J. & Felgueroso, Florentino & Jimeno, Juan F., 2000.
"Youth labour markets in Spain: Education, training, and crowding-out,"
European Economic Review,
Elsevier, vol. 44(4-6), pages 943-956, May.
- Jimeno,Juan F. & Felgueroso, Florentino & Dolado, Juan José, 1999. "Youth labour markets in Spain: education, training and crowding-out," UC3M Working papers. Economics 6169, Universidad Carlos III de Madrid. Departamento de Economía.
- Dale Mortensen, 1984.
"Job Search and Labor Market Analysis,"
594, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Acemoglu, Daron, 2001. "Good Jobs versus Bad Jobs," Journal of Labor Economics, University of Chicago Press, vol. 19(1), pages 1-21, January.
- Pissarides, C A, 1979. "Job Matchings with State Employment Agencies and Random Search," Economic Journal, Royal Economic Society, vol. 89(356), pages 818-833, December.
When requesting a correction, please mention this item's handle: RePEc:hal:cesptp:halshs-00113476. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CCSD)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.