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Search, Screening and Sorting

Author

Listed:
  • Cai, Xiaoming

    (Peking University)

  • Gautier, Pieter A.

    (Vrije Universiteit Amsterdam)

  • Wolthoff, Ronald P.

    (University of Toronto)

Abstract

We investigate the effect of search frictions on labor market sorting by constructing a model which is in line with recent evidence that employers collect a pool of applicants before interviewing a subset of them. In this environment, we derive the necessary and sufficient conditions for sorting in applications as well as matches. We show that positive sorting is obtained when production complementarities outweigh a force against sorting measured by a quality-quantity elasticity. Interestingly, we find that the required degree of production complementarity for positive sorting is increasing in the number of interviews: it ranges from square-root-supermodularity if each firm can interview a single applicant to log-supermodularity if each firm can interview all its applicants.

Suggested Citation

  • Cai, Xiaoming & Gautier, Pieter A. & Wolthoff, Ronald P., 2021. "Search, Screening and Sorting," IZA Discussion Papers 14501, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp14501
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    References listed on IDEAS

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    Cited by:

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    3. Banfi, Stefano & Choi, Sekyu & Villena-Roldán, Benjamín, 2022. "Sorting on-line and on-time," European Economic Review, Elsevier, vol. 146(C).

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    Keywords

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    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity

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