life cycle equilibrium unemployment this paper extends the job creation job destruction approach to the labor market to take into account a deterministic finite horizon as hirings and separations depend on the time over which investment costs can be recouped the life cycle setting implies age differentiated labor market flows while search by the unemployed falls with age the separation rate is rather u shaped over the life cycle worker heterogeneity in the context of undirected search implies an intergenerational externality which is not eliminated by the hosios condition we show that age specific policies are required to attain the first best allocation

mommy tracks and public policy on self fulfilling prophecies and gender gaps in hiring and promotion abstract consider a model with two types of jobs the profitability of hiring a worker to a fast track job depends not only on his or her observable talent but also on incontractible effort we investigate whether self fulfilling expectations may lead to higher hiring or promotion standards for women if employers expect women to do more household work than men thereby exerting less effort in their paid job then women must be more talented to make it profitable to hire them specialization in the family will then result in women doing most of the household work such self fulfilling prophecies can be defeated by affirmative action or family policy however it is unlikely that temporary policy can move the economy to a symmetric equilibrium policy must be made permanent anti discrimination policy need not enhance efficiency and from a distribution viewpoint this is a policy with both winners and losers

optimal unemployment insurance in a matching equilibrium this article considers optimal unemployment insurance ui in an equilibrium matching framework where wages are determined by strategic bargaining it compares the outcome with the standard nash bargaining approach which can be interpreted as union wage bargaining with an insider outsider distortion it also shows that a coordinated policy approach one that chooses job creation subsidies and ui optimally generates a much greater welfare gain than a policy that simply varies ui payments by duration

why do firms hide bribes and unofficial activity after communism abstract our survey of private manufacturing firms finds the size of hidden unofficial activity to be much larger in russia and ukraine than in poland slovakia and romania a comparison of cross country averages shows that managers in russia and ukraine face higher effective tax rates worse bureaucratic corruption greater incidence of mafia protection and have less faith in the court system our firm level regressions for the three eastern european countries find that bureaucratic corruption is significantly associated with hiding output

search theory the 2010 nobel memorial prize in economic sciences this paper surveys search theory with an emphasis on the contributions of the 2010 laureates for the nobel memorial prize in economic sciences peter diamond dale mortensen and christopher pissarides

matching with interviews abstract this paper explores how interviews affect the matching process when worker productivity is private information wages are determined by a single round of strategic bargaining after the worker is interviewed the implications of this hiring process for the efficiency of matching and the incidence and severity of statistical discrimination are considered the better are firms at identifying productive workers the worse the average quality of the unemployment pool so interviewing tends to slow down matching for every one multiple pareto rankable equilibria are possible such that any social group in a bad equilibrium faces stricter hiring standards longer spells of unemployment and lower welfare

human capital and unemployment dynamics why more educated workers enjoy greater employment stability why do more educated workers experience lower unemployment rates and lower employment volatility empirically these workers have similar job finding rates but much lower and less volatile separation rates than their less educated peers we argue that on the job training being complementary to formal education is the reason for this pattern using a search and matching model with endogenous separations we show that investments in match specific human capital reduce incentives to separate but leave the job finding rate essentially unaffected the model generates unemployment dynamics quantitatively consistent with the data finally we provide novel empirical evidence supporting the mechanism studied in the paper this article is protected by copyright all rights reserved

unemployment responses to skill biased technology shocks the role of labour market policy do skill biased shocks that increase the spread of labour productivities interacting with different policy regimes explain the rise in unemployment in europe relative to the united states in the 1980s and 1990s the hypothesis is an implication of a version of the mortensen and pissarides 1994 model of equilibrium unemployment which allows for worker heterogeneity a calibrated version of the model implies that a similar unemployment increase would have occurred in the united states over this period given changes in relative productivity by education implied by observed wage changes had unemployment compensation and employment protection policies been at european levels

a matching model with endogenous skill requirements we consider a labor market in which workers differ in their abilities and jobs differ in their skill requirements the distribution of worker abilities is exogenous but we model the choice of skill requirements by firms high skill jobs produce more output than low skill jobs but high skill jobs require high skill workers and thus are more difficult to fill we use a matching model together with a nash bargaining approach to wage setting to determine the equilibrium mix of job types along with the equilibrium relationship between worker and job characteristics wages and unemployment

sorting versus screening search frictions and competing mechanisms in a market where sellers compete by posting trading mechanisms we allow for a general search technology and show that its features crucially affect the equilibrium mechanism price posting prevails when meetings are rival i e when a meeting by one buyer reduces another buyer s meeting probability under price posting buyers reveal their type by sorting ex ante only if the meeting technology is sufficiently non rival price posting is not an equilibrium multiple buyer types then visit the same sellers who screen ex post through auctions

methodological practices in international business research an after action review of challenges and solutions we combine after action review and needs assessment frameworks to describe the four most pervasive contemporary methodological challenges faced by international business ib researchers as identified by authors of journal of international business studies articles psychometrically deficient measures mentioned in 73 of articles idiosyncratic samples or contexts mentioned in 62 2 of articles less than ideal research designs mentioned in 62 2 of articles and insufficient evidence about causal relations mentioned in 8 1 of articles then we offer solutions to address these challenges demonstrating why and how the conceptualization of a construct is accurate given a particular context specifying whether constructs are reflective or formative taking advantage of the existence of multiple indicators to measure multi dimensional constructs using particular samples and contexts as vehicles for theorizing and further theory development seeking out particular samples or contexts where hypotheses are more or less likely to be supported empirically using big data techniques to take advantage of untapped sources of information and to re analyze currently available data implementing quasi experiments and conducting necessary condition analysis our article aims to advance ib theory by tackling the most typical methodological challenges and is intended for researchers reviewers and editors research consumers and instructors who are training the next generation of scholars

income inequality the consequences of skill upgrading when firms have hierarchical organizational structures during the last three decades most developed countries have experienced increasing income inequality using danish register data from 1992 to 2007 for all private sector employees we confirm that income inequality has increased in denmark we also observe an increase in the relative employment of highly educated individuals as well as differential income growth rates across employee subgroups where in particular managers experienced significant real income progression we use an equilibrium search framework with on the job search to derive the income distribution in this model we can determine the management and education premia we can also show that when our model is exposed to skill upgrading it is capable of producing income dynamics similar to those observed in the danish income distribution jel j3 j6 m5

the effects of macroeconomic conditions at graduation on overeducation this article shows that unfavorable economic conditions at graduation decrease the likelihood of a good job worker match over a worker s subsequent career mismatch is quantified in terms of overeducation by both industry and occupation the german socio economic panel and region level unemployment rates from 1994 to 2012 are used instrumental variables estimates account for endogenous graduation timing a single percentage point increase in regional unemployment causes an increase in the probability of overeducation of 1 6 1 7 percentage points for university graduates effects for technical tertiary education and apprenticeship graduates are smaller labor market entry conditions affect workers for up to 9 years after graduation jel j23 j22 e32 i23

statistical discrimination and duration dependence in the job finding rate this article models a frictional labour market where employers endogenously discriminate against the long term unemployed the estimated model replicates recent experimental evidence which documents that interview invitations for observationally equivalent workers fall sharply as unemployment duration progresses we use the model to quantitatively assess the consequences of such employer behaviour for job finding rates and long term unemployment and find only modest effects given the large decline in callbacks interviews lost to duration impact individual job finding rates solely if they would have led to jobs we show that such instances are rare when firms discriminate in anticipation of an ultimately unsuccessful application discrimination in callbacks is thus largely a response to dynamic selection with limited consequences for structural duration dependence and long term unemployment

on the inefficiency of matching models of unemployment with heterogeneous workers and jobs when firms rank their applicants in a circular matching model with bargained wages firms rank their applicants and pick the most suitable one job creation appears to lower the average output as firms do not internalize this effect there are too many jobs in a laissez faire equilibrium under the hosios condition by contrast job rejection is efficient for the equilibrium value of market tightness consequently introducing unemployment compensation raises the aggregate income by lowering market tightness due to the isomorphism between the two models these results extend to match specific productivities however competitive search restores market efficiency

are the unemployed unemployable abstract this paper develops a matching model of the labor market under wage rigidity when hiring decisions are irreversible there are two types of workers the skilled and the unskilled the model is used to analyze whether technological advances may have increased unemployment it is shown that it is likely to be so if they are associated with an increase in the productivity and or the supply of skilled workers relative to unskilled workers these effects are stronger when hiring decisions are more irreversible

labor supply estimation biases from disregarding nonwage benefits labor supply models and research underpinned by labor supply decisions typically assume the agents choices are functions of wage and wage offers however there is evidence that these selections are not only wage driven but at least in part depend on non wage benefits encompassed in jobs and occupations in this paper i develop and estimate a stochastic dynamic model of occupational and job choice where non wage benefits are directly incorporated into the decision alongside wages a nested model within this is a wage model representing common practice in the literature where non wage benefits are disregarded i separately estimate the full model and the nested wage model in order to compare the implications of omitting non wage benefits three analyses are compared elasticities economy wide structural changes in occupations and inequality reduction intervention policies i find that while disregarding non wage benefits generally causes biases there are cases when the two models predict very similar outcomes and have close estimates such as in occupational specific elasticities and job transition elasticities however i demonstrate that these special cases are products of canceling biases and that the same estimates on subpopulations are biased these results suggest that in most cases ignoring non wage benefits will bias estimates by overestimating the importance of wage in the selection process and so any intervention or change in wages will be over emphasized and by disregarding changes in relative prices between wage and non wage benefits such as happens through changes in wage taxes or in non wage benefits these biases can be severe the results suggest that ignoring non wage benefits in labor supply decisions is appropriate only in the special case in which subpopulation biases negate each other which is atypical i would like to thank moshe buchinsky and maria casanova for their invaluable and continual help in this project as well as rosa matzkin arturo harker seth kerstein dan ben moshe peter bergman anonymous referees at review of economics and statistics and seminar participants at ucla rand syracuse university the bureau of labor statistics and the census bureau for numerous helpful comments and suggestions

search mismatch and unemployment abstract this paper explores the efficiency of the equilibrium allocation in a matching model with heterogeneous workers and jobs in the basic setup there are two types of workers with different skill levels both types can perform the simple tasks of unskilled jobs while the complex tasks of skilled jobs require a high ability worker we demonstrate that the equilibrium outcome with random search and ex post bargaining is never efficient under the hosios condition the average wage is correct but bargaining compresses the wage distribution relative to workers shadow values this feature distorts the relative profits of jobs making it too attractive for firms to create skilled jobs furthermore due to the low skill premium the high ability workers may accept too many jobs finally in an extension we show that the introduction of separate markets for the two types of jobs is not sufficient to guarantee efficiency

overeducation in the labor market this article examines the reasons for the observed discrepancy between workers actual and required levels of schooling and the resulting differences in returns to schooling overeducated workers are found to be younger and to have lower amounts of on the job training than workers with the required level of schooling they also have higher rates of firm and occupational mobility characterized by movement of higher level occupations the findings suggest that overeducation can be explained by the trade off between schooling and other components of human capital and by the mobility patterns of overeducated workers

long term partnership formation marriage and employment of course marriage and employment are different nevertheless a worker looking for a job a rm looking for worker or a single person looking for a marriage partner face similar problems as all are seeking a long term partner indeed forming long term partnerships is a common occurrence in life there are many other examples business people search for other business people to form a pro table relationship bridge players seek to nd a suitable partners students search for a good university we would all like to nd a good friend etc the problem becomes signi cant if there are substantial differences in the return obtained from forming a partnership with different partners for example employers differ in the wages they offer or in the work environment they provide in such a situation a worker may reject some job offers similarly as many have learned to their cost some make better marriage partners than others the problem is two sided while a worker is evaluating a potential employer the employer is also evaluating the worker it is this two sided aspect of the problem that generates a signi cant interest a worker s willingness to accept employment at a rm depends not only on the characteristics of the rm but also the other possible options open to the worker the better an individual s opportunities elsewhere the more selective he or she will be in evaluating a potential partnership an academic who believes harvard may make an offer in the near future will be more selective in evaluating offers from lesser universities in this way expectations play a role if a single man believes that few if any women will nd him an acceptable marriage partner then he may accept the rst opportunity that presents itself partnership formation typically does not comply with a classic market situation where all participants know everything and all trades take place at zero cost finding a job nding a husband or wife or nding a business partner is a time consuming activity where opportunities typically arrive over time at uncertain intervals of time of course we can act in ways that in uence the arrival rate of potential partner workers go to employment agencies or read help wanted advertisements in newspapers singles of a certain age go to discos or join tennis clubs the literature on search and matching sm see mortensen 1982 and pissarides 1990 for early examples 1 provides an excellent framework for the economic journal 109 june f307 f334 royal economic society 1999 published by blackwell publishers 108 cowley road oxford ox4 1jf uk and 350 main street malden ma 02148 usa

education matching and the allocative value of romance societies are characterized by customs governing the allocation of non market goods such as marital partnerships we explore how such customs affect the educational investment decisions of young singles and the subsequent joint labour supply decisions of partnered couples we consider two separate matching paradigms for agents with heterogeneous abilities one where partners marry for money and the other where partners marry for romantic reasons orthogonal to productivity or debt these generate different investment incentives and therefore have a real impact on the market economy while marrying for money generates greater investment efficiency romantic matching generates greater allocative efficiency since more high ability individuals participate in the labour market the analysis offers the possibility of explaining cross country differences in educational investments and labour force participation based on matching regimes

can supply create its own demand implications for rising skill differentials in the 1980s several advanced countries saw rising skilled wage differentials at the same time as increases in the supply of skilled labour some commentators use the orthodox factor demand model based on a competitive labour market to deduce that there must have been shifts in the relative demand curve towards more educated labour in this paper we show that use of this argument is in some situations vulnerable to two criticisms i it is possible to write down reasonable economic models in which the increase in the relative supply of a group can actually increase its relative wage and employment ii as an empirical matter sample selection bias could be a problem to illustrate these two points we first present a simple matching model and then some empirical evidence based on the large increase in the relative supply of more educated workers that followed the late 1980s changes in the uk educational system but did not result in falling wage differentials of the more educated 1997 elsevier science b v

labor search and matching in macroeconomics abstract the labor search and matching model plays a growing role in macroeconomic analysis this paper provides a critical selective survey of the literature four fundamental questions are explored how are unemployment job vacancies and employment determined as equilibrium phenomena what determines worker flows and transition rates from one labor market state to another how are wages determined what role do labor market dynamics play in explaining business cycles and growth the survey describes the basic model reviews its theoretical extensions and discusses its empirical applications in macroeconomics the model has been developed against the background of difficulties with the use of the neo classical frictionless model of the labor market in macroeconomics its success includes the modelling of labor market outcomes as equilibrium phenomena the reasonable fit of the data and when inserted into business cycle models improved performance of more general macroeconomic models at the same time there is evidence against the nash solution used for wage setting and an active debate as to the ability of the model to account for some of the cyclical facts

revolutionary effects of new information technologies in markets with imperfect information and heterogeneity the information technology affects the rate at which agents meet which affects the distribution of production technologies across firms multiple equilibria may arise because the reservation utility and the lowest production technology in use affect each other the adoption of novel information technologies may then entail a revolution in the sense of a move from an inefficient to equilibrium inefficient production technologies are swiftly moved even in sectors where the new information technology has only recently been introduced the results apply to consumer products labour intermediates and institutions royal economic society 2006

upskilling do employers demand greater skill when workers are plentiful using a proprietary database of online job postings we find that education and experience requirements rose during the great recession these increases were larger in states and occupations that e

worker turnover at the firm level and crowding out of lower educated workers this paper investigates whether employers exploit cyclical downturns to improve the average skill level of their work force we use a unique dataset that contains information on workers jobs as well as firm characteristics our findings are that at each job level mainly lower educated workers leave during downturns furthermore at each level of job complexity workers with a higher education are not more productive than lower educated workers we find no evidence that higher educated workers crowd out lower educated workers during recessions

wage differentials employer size and unemployment the unique equilibrium solution to a game in which a continuum of individual employers choose permanent wage offers and a continuum of workers search by sequentially sampling from the set of offers is characterized wage dispersion is a robust outcome provided that workers search while employed as well as when unemployed the unique nondegenerate equilibrium distribution of wage offers is constructed for three cases 1 identical workers and employers 2 identical employers and an atomless distribution of worker supply prices and 3 identical workers and an atomless distribution of job productivities copyright 1998 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association