Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/207119
Authors: 
Mayr-Dorn, Karin
Year of Publication: 
2019
Series/Report no.: 
Working Paper No. 1906
Abstract: 
This paper analyses the effect of firm learning on labor market efficiency in a frictional labor market with asymmetric information. I consider a model with random matching and wage bargaining a la Pissarides (1985, 2000) where worker ability is unknown to firms at the hiring stage. Firm learning increases relative expected earnings in high-ability jobs and, thereby, enhances imitation incentives of low-ability workers. The net effect on aggregate expected match surplus and unemployment is indeterminate a priori. Numerical results show that firm learning does not increase labor market efficiency.
Subjects: 
job search
on-the-job effort
asymmetric information
learning
JEL: 
D82
D83
J64
Document Type: 
Working Paper

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