Using a unique vacancy dataset, we find that the Public Employment Agency (PEA) distributes workers more evenly across vacancies than the private market. We investigate the implications of having such a market place by using a directed search model, where firms can search via the PEA or the private market. Lower coordination frictions reduce wage competition and enable registered firms to pay lower wages compared to the private market. This advantage has to be traded off against the negative selection of applicants coming through the PEA. We take these theoretical predictions to the data and find strong support for them.

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may Employment Protection and the Market for Innovations AbstractWe study the effects of employment protection taking into account that firms can invest in R&D or buy new technologies in order to restore their productivity. To do so we develop an equilibrium matching model with an imperfect labor and innovation market. If employment protection is introduced, firms' willingness to pay for product or process innovations increases. This shifts economic activity towards firms specializing in process and product innovation and triggers entry of new start-ups. We calibrate our model to match aggregate US labor and product market statistics and show that our model generates the estimated negative impact of wrongful dismissal laws in the US on productivity and the positive effect on the number of innovations and firms.JEL-Code: J640, J650, O310, O380.

Models of random search, directed search, or stock-ow matching differ substantially in the way they assume that job seekers and firms behave during the recruitment process. In this paper we identify new patterns about the recruitment behaviour of firms using the entropy balancing technique and argue that stock-flow matching models-if suitably amended by a timeconsuming screening technology-are best able to explain why the vacancy-filling hazard is increasing during the planned search period and decreases thereafter, why most applicants arrive early in the recruitment process, and why the willingness to pay higher wages or to hire less qualified or experienced applicants increases for firms, which have been unlucky and unable to hire until the intended starting date. JEL-Codes: J630, J640.

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. In many countries Public Employment Agencies (PEA) offer intermediation services to help as many people as possible to find work by bringing together supply and demand. Using a unique vacancy-level data-set on the number of applicants, we find positive effects of the intermediation services on mitigating search frictions. In particular, we show that applications coming via the PEA are more evenly distributed across vacancies than the applications coming via other search channels. This holds for the total number of applicants as well as the suitable number of applicants. Our results suggest that the market operated by the PEA attains more coordinated job applications compared to other search channels. Terms of use: Documents in