The amplification of unemployment fluctuations through self-selection
By: Robert E. Hall.
Contributors: National Bureau of Economic Research.
Series: NBER working paper series ;; working paper 11186; Working paper series (National Bureau of Economic Research : Online) ;; working paper no. 11186.
Publisher: National Bureau of Economic Research
Published: 2005
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Subjects: Unemployment -- Mathematical models.; Applications for positions -- Mathematical models.
Description: "Unemployment arises from frictions in the matching of job-seekers and employers.  The level of resources that employers devote to evaluating applicants for jobs is a key factor in the magnitude of the frictions.  Unemployment will be low if employers can review applicants cheaply.  The cost of evaluation per hire depends on the fraction of applicants who are qualified for the job.  Applicants may be better informed about their qualifications than are employers.  If incentives induce self-selection by job-seekers, so that they apply mainly for jobs where they are qualified, friction and thus unemployment will be low.  Self-selection is strongest in markets where unemployment is low and jobs are easy to find.  Because of this positive feedback, the equilibrium in a market with self-selection is fragile%u2014unemployment is sensitive to its determinants.  Self-selection provides a mechanism for amplification of small changes in the determinants of unemployment"--National Bureau of Economic Research web site.
Notes: Also available in print.
Includes bibliographical references.
Title from PDF file as viewed on 3/16/2005.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.