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

  • Eriksson, Stefan

    ()

    (Department of Economics)

  • Gottfries, Nils

    ()

    (Department of Economics)

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 explain the high and persistent European unemployment.

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Paper provided by Uppsala University, Department of Economics in its series Working Paper Series with number 2000:3.

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Length: 37 pages
Date of creation: 07 Mar 2000
Date of revision:
Publication status: Published in Labour Economics, 2005, pages 407-428.
Handle: RePEc:hhs:uunewp:2000_003
Contact details of provider: Postal:
Department of Economics, Uppsala University, P. O. Box 513, SE-751 20 Uppsala, Sweden

Phone: + 46 18 471 25 00
Fax: + 46 18 471 14 78
Web page: http://www.nek.uu.se/
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