Search-Theoretic Models of the Labor Market: A Survey
- (pp. 959-988)
Abstract
We survey the literature on search-theoretic models of the labor market. We show how this approach addresses many issues, including the following: Why do workers sometimes choose to remain unemployed? What determines the lengths of employment and unemployment spells? How can there simultaneously exist unemployed workers and unfilled vacancies? What determines aggregate unemployment and vacancies? How can homogeneous workers earn different wages? What are the tradeoffs firms face from different wages? How do wages and turnover interact? What determines efficient turnover? We discuss various modeling choices concerning wage determination and the meeting process, including recent models of directed search.Citation
Rogerson, Richard, Robert Shimer, and Randall Wright. 2005. "Search-Theoretic Models of the Labor Market: A Survey." Journal of Economic Literature, 43 (4): 959-988. DOI: 10.1257/002205105775362014JEL Classification
- J22 Time Allocation and Labor Supply
- J31 Wage Level and Structure; Wage Differentials
- J41 Labor Contracts
- J63 Labor Turnover; Vacancies; Layoffs