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In Incentive Theory of Matching

  • This paper presents a theory explaining the labor market matching process through microeconomic incentives. There are heterogeneous variations in the characteristics of workers and jobs,and firms face adjustment costs in responding to these variations. Matches and separations are described through firms' job offer and firing decisions and workers' job acceptance and quit decisions. This approach obviates the need for a matching function. On this theoretical basis, we argue that the matching function is vulnerable to the Lucas critique. Our calibrated model for the U.S. economy can account for important empirical regularities that the conventional matching model cannot.

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Metadaten
Document Type:Article
Language:English
Author(s):Alessio Brown, Christian Merkl, Dennis Snower
Parent Title (English):Macroeconomic Dynamics
Publication year:2015
Publishing Institution:Hertie School
First Page:643
Last Page:668
DOI:https://doi.org/10.1017/S1365100513000527
Release Date:2019/09/30
Tag:matching, incentives, adjustment costs, unemployment, employment, quits, firing, job offers, job acceptance
Volume:19
Issue:3
Licence of document (German):Metadaten / metadata
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