Munich Personal RePEc Archive

Directed search and job rotation

Li, Fei and Tian, Can (2011): Directed search and job rotation.

[img]
Preview
PDF
MPRA_paper_33875.pdf

Download (274Kb) | Preview

Abstract

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.

UB_LMU-Logo
MPRA is a RePEc service hosted by
the Munich University Library in Germany.