Chapter 39 New developments in models of search in the labor market

Mortensen, Dale T.; Pissarides, Christopher

doi:10.1016/s1573-4463(99)30025-0

Cited by 683 publications

(639 citation statements)

References 37 publications

Supporting

Mentioning

598

Contrasting

Unclassified

Order By: Relevance

“…Nevertheless, we know from empirical literature that an increase of firing costs decreases dismissal probability (reservation productivity) and job creation (market tightness). 3 Also, most theoretical works, as, e.g., Bertola (1990), Garibaldi (1998), Mortensen and Pissarides (1999) or Pissarides (2001) approve this result. In the above model framework, this can only be the case if the equilibrium is located on the upward sloping part of the JD, because only there both terms in brackets of equations (11) and (12) are positive, while D < 0.…”

Section: Increasing Firing Costs Tmentioning

confidence: 85%

“…From a theoretical point of view, the effects of pure firing costs on reservation productivity and market tightness are not clearly cut in a model framework with the possibility of shirking and endogenous dismissal decision as presented above, because there is a positive feedback between the non-shirking wage and reservation productivity (see also Mortensen and Pissarides 1999). Still, it seems reasonable to assume that pure firing costs decrease the dismissal probability and job creation (which yields an ambiguous effect on unemployment).…”

Section: Summary and Discussionmentioning

confidence: 97%

“…, which means that the marginal effect of an increase of reservation productivity on wages exceeds the marginal increase of the production value of a job at reservation productivity, the lhs of equation (8), see also Mortensen and Pissarides (1999).…”

Section: Job Destruction Job Creation and Unemploymentmentioning

confidence: 99%

See 2 more Smart Citations

Firing costs, severance payments, judicial mistakes and unemployment

Stähler

2008

Labour Economics

View full text Add to dashboard Cite

Zusammenfassung:In the discussion about employment protection, little attention has been given to judicial mistakes. In most countries, only in the case of dismissals due to economic reasons, the employee is entitled to a severance payment. Given judicial mistakes when reviewing a dismissal, shirkers might falsely receive a severance payment while non-shirker might not. At fighting unemployment, increasing the level of severance payments can increase employment for small judicial mistakes and effectively dominate the pure firing costs which leave ambiguous effects on employment. For large judicial mistakes, the opposite can hold and severance payments can decrease employment. JEL Klassifikation: AbstractIn the discussion about employment protection, little attention has been given to judicial mistakes. In most countries, only in the case of dismissals due to economic reasons, the employee is entitled to a severance payment. Given judicial mistakes when reviewing a dismissal, shirkers might falsely receive a severance payment while non-shirker might not. At fighting unemployment, increasing the level of severance payments can increase employment for small judicial mistakes and effectively dominate the pure firing costs which leave ambiguous effects on employment. For large judicial mistakes, the opposite can hold and severance payments can decrease employment. Theme: Labour Market Policy

show abstract

Section: Increasing Firing Costs Tmentioning

confidence: 85%

Section: Summary and Discussionmentioning

confidence: 97%

See 1 more Smart Citation

Firing costs, severance payments, judicial mistakes and unemployment

Stähler

2008

Labour Economics

View full text Add to dashboard Cite

show abstract

“…The model is an extension of Mortensen and Pissarides (1999). There are two distinct geographical regions, characterized by different levels of total factor productivity, p i .…”

Section: The Modelmentioning

confidence: 99%

Public employment policies and regional unemployment differences

Caponi

2017

Regional Science and Urban Economics

View full text Add to dashboard Cite

“…As in the standard search-matching model (see e.g. Pissarides, 1999, andPissarides, 2000), we assume that M(.) is increasing both in its arguments, concave and homogeneous of degree 1 (or equivalently has constant return to scale).…”

Section: M(u V )mentioning

confidence: 99%

Endogenous job destruction and job matching in cities

Zénou

2009

Journal of Urban Economics

View full text Add to dashboard Cite

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 Endogenous Job Destruction and Job Matching in CitiesYves Zenou The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit company supported by Deutsche Post World Net. The center is associated with the University of Bonn and offers a stimulating research environment through its research networks, research support, and visitors and doctoral programs. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. ABSTRACT Endogenous Job Destruction and Job Matching in Cities *We propose a spatial search-matching model where both job creation and job destruction are endogenous. Workers are ex ante identical but not ex post since their job can be hit by a technological shock, which decreases their productivity. They reside in a city and commuting to the job center involves both pecuniary and time costs. Thus, workers with high wages are willing to live closer to jobs to save on time commuting costs. We show that, in equilibrium, there is a one-to-one correspondence between the productivity space and the urban location space since high-productivity workers bid away low-productivity workers in order to occupy locations close to jobs. We also show that in the bargaining process, there is a spatial element in the wage setting since firms need to compensate workers for their spatial costs. Compared to the non-spatial model, the unemployment rate and the reservation productivity are lower and the job-creation rate is higher because the urban space through commuting costs and land rent create additional frictions in the labor market.JEL Classification: D83, J41, J64, R14

show abstract

Chapter 39 New developments in models of search in the labor market

Cited by 683 publications

References 37 publications

Firing costs, severance payments, judicial mistakes and unemployment

Firing costs, severance payments, judicial mistakes and unemployment

Public employment policies and regional unemployment differences

Endogenous job destruction and job matching in cities

Contact Info

Product

Resources

About