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Title:Variable search intensity in an economy with coordination unemployment PDF Logo
Authors:Kaas, Leo
Issue Date:2008
Series/Report no.:IZA discussion papers 3697
Abstract:This paper analyzes an urn-ball matching model in which workers decide how intensively they sample job openings and apply at a stochastic number of suitable vacancies. Equilibrium is not constrained efficient; entry is excessive and search intensity can be too high or too low. Moreover, an inefficient discouraged-worker effect among homogenous workers emerges under adverse labor market conditions. Unlike existing coordination-friction economies with fixed search intensity, the model can account for the empirical relation between the job-finding rate and the vacancy-unemployment ratio, provided that search costs are small and that search intensity is sufficiently procyclical.
Subjects:Matching function
coordination frictions
unemployment
JEL:E24
Persistent Identifier of the first edition:urn:nbn:de:101:1-20081014486
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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