Li, Fei and Tian, Can (2011): Directed search and job rotation.
Download (274Kb) | Preview
In this note, we consider the impact of job rotation in a directed search model in which firm sizes are endogenously determined, and match quality is initially unknown. A large firm benefits from the opportunity of rotating workers so as to partially overcome mismatch loss. As a result, in the unique symmetric subgame perfect equilibrium, large firms have higher labor productivity and lower separation rate. In contrast to the standard directed search model with multi-vacancy firms, this model can generate a positive correlation between firm size and wage without introducing any exogenous productivity shock or imposing non-concave production function assumption.
|Item Type:||MPRA Paper|
|Original Title:||Directed search and job rotation|
|Keywords:||Directed Search, Job Rotation, Firm Size and Wage, Firm Size and Labor Productivity|
|Subjects:||L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L11 - Production, Pricing, and Market Structure; Size Distribution of Firms
J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J31 - Wage Level and Structure; Wage Differentials
J - Labor and Demographic Economics > J6 - Mobility, Unemployment, and Vacancies > J64 - Unemployment: Models, Duration, Incidence, and Job Search
|Depositing User:||Fei Li|
|Date Deposited:||05. Oct 2011 13:57|
|Last Modified:||12. Feb 2013 10:06|
Brown C. and J. Medoff (1989): "The Employer Size-Wage Effect, " Journal of Political Economy, Vol. 97, pp. 1027-1059.
Burdett K., S. Shi, and R. Wright (2001): "Pricing and Matching with Frictions," Journal of Political Economy, Vol. 109, pp. 1060-1085
Hawkins W. (2011): "Competitive Search, Efficiency, and Multi-worker Firms," mimeo University of Rochester.
Kaas L., and P. Kircher (2011): "Efficient Firm Dynamics in a Frictional Labor Market," mimeo LSE.
Lester B. (2010): "Directed Search with Multi-vacancy Firms," Journal of Economic Theory, Vol. 149, pp. 2108-2132.
Meyer M. (1994): "The Dynamics of Learning with Team Production: Implications for Task Assignment," The Quarterly Journal of Economics, Vol. 109, pp. 1157-1184.
Montgomery J. (1991): "Equilibrium Wage Dispersion and Interindustry Wage Differentials," The Quarterly Journal of Economics , Vol. 106, pp. 163-179
Oi W., and T. Idson (1999): "Firm Size and Wages," in O.C. Ashenfelter, D. Card, eds., Handbook of Labor economics, Vol.3, Amesterdam; New York: Elsevier.
Ortega J. (2001): "Job Rotation as a Learning Mechanism," Management Science, Vol. 47, pp. 1361-1370.
Papageorgiou T. (2011) "Large Firms and Internal Labor Market," mimeo Penn State University.
Peters M. (1991): "Ex Ante Price Offers in Matching Games Non-Steady States," Econometrica, Vol. 59, pp. 1425-1454.
Shi S. (2002): "Product Market and the Size-wage Differential," International Economic Review, Vol. 43, pp. 21-45.
Tan S. (2011): "Directed Search and Firm Size," International Economic Review, forthcoming.