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http://hdl.handle.net/10419/20204
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| Title: | | Efficiency in a matching model with heterogeneous agents : too many good or bad jobs?  |
| Authors: | | Blázquez, Maite Jansen, Marcel |
| Issue Date: | | 2003 |
| Series/Report no.: | | IZA Discussion paper series 968 |
| Abstract: | | This paper analyses the efficiency of the equilibrium allocation in a matching model with two types of workers and jobs. The basic assumption is that high-skill workers can perform both skilled and unskilled jobs, while low-skill workers can only perform unskilled jobs. Our first result shows that the equilibrium with ex-post bargaining is never efficient. Second, under Hosios? (1990) condition we show that high-skill workers are under-valued in equilibrium, while the opposite holds for low-skill workers. Firms therefore tend to create too few unskilled jobs, resulting in a suboptimally high unemployment rate for low-skill workers. We show that these results generalize to environments with more types of agents and different production technologies. Finally, in an extension we derive a tax scheme that restores efficiency and we show how workers? bargaining strength affects unemployment and skill-mismatch. |
| Subjects: | | matching ex post bargaining heterogeneity efficiency |
| JEL: | | D61 C78 J64 |
| Document Type: | | Working Paper |
| Appears in Collections: | | IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)
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