Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/282594 
Authors: 
Year of Publication: 
2023
Series/Report no.: 
IZA Discussion Papers No. 16467
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
I study a dynamic search-matching model with two-sided heterogeneity, a production complementarity that induces labor market sorting, and aggregate shocks. In response to a positive productivity shock, incentives to sort increase disproportionately. Firms respond by posting additional vacancies, and the strength of the response is increasing in firm productivity. The distribution of unemployment worker types adjusts slowly, which amplifies job creation in the short run. In the long run, falling unemployment curtails the firms' vacancy posting. The model closely matches time-series moments from U.S. labor market data and produces realistic degrees of wage dispersion and labor market sorting.
Subjects: 
search
matching
sorting
mismatch
aggregate shocks
worker heterogeneity
firm heterogeneity
unemployment dynamics
JEL: 
E24
E32
J63
J64
Document Type: 
Working Paper

Files in This Item:
File
Size
2.93 MB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.