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Search-Theoretic Models of the Labor Market: A Survey

Richard Rogerson¹; Robert Shimer²; Randall Wright³

¹ Arizona State University · ² University of Chicago · ³ University of Pennsylvania

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.

DOI

10.1257/002205105775362014

Volume

43 (4)

Pages

959-988

Language

en

Export

BibTeX

Sources

crossref openalex