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Cross Sectional Efficiency and Labor Hoarding in an Matching Model of Unemployment / Giuseppe Bertola, Ricardo J. Caballero.
- Format:
- Book
- Author/Creator:
- Bertola, Giuseppe.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w4472.
- NBER working paper series no. w4472
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 1993.
- Summary:
- We study positive and normative aspects of steady-state equilibrium in a market where firms of endogenous size experience idiosyncratic shocks and undergo a costly search process to hire their workers. The stylized model we propose highlights interactions between job-security provisions and sectoral shocks in determining the natural rate of unemployment, the allocation of labor, and the extent of labor hoarding, and rationalizes cross-sectional asymmetries of gross employment flows at the firm level. In our model, where productivity and search costs are dynamically heterogeneous across firms, decentralized wage bargains imply important cross-sectional inefficiencies, which overshadow the static search inefficiencies on which simpler models focus.
- Notes:
- Print version record
- September 1993.
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