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Mismatch and Wage Posting

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  • Frédéric Gavrel

    (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper provides a wage posting model of the labor market in which workers' search strategies are pure. To that end, the persistency of vacant jobs results from a mismatch problem, not a pure coordination problem. Since firms cannot commit to an output cutoff lower than the announced wage, laissez-faire is inefficient. Under a binding condition however, public policy can restore market efficiency by associating a minimum wage with a layoff tax.

Suggested Citation

  • Frédéric Gavrel, 2018. "Mismatch and Wage Posting," Working Papers halshs-01884213, HAL.
    • Handle: RePEc:hal:wpaper:halshs-01884213
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01884213
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    References listed on IDEAS

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    1. Christopher A. Pissarides, 2000. "Equilibrium Unemployment Theory, 2nd Edition," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262161877, December.
    2. Gavrel, Frédéric, 2012. "On the inefficiency of matching models of unemployment with heterogeneous workers and jobs when firms rank their applicants," European Economic Review, Elsevier, vol. 56(8), pages 1746-1758.
    3. Frédéric Gavrel, 2018. "The magic of layoff taxes requires equilibrium stability," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 25(2), pages 404-411, April.
    4. Benoît Julien & Sephorah Mangin, 2016. "Efficiency in Search and Matching Models: A Generalized Hosios Condition," Monash Economics Working Papers 28-16, Monash University, Department of Economics.
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    9. James Albrecht & Pieter A. Gautier & Susan Vroman, 2006. "Equilibrium Directed Search with Multiple Applications," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 73(4), pages 869-891.
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