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Author: Leo Kaas Publisher: ISBN: Category : Languages : en Pages : 57
Book Description
The introduction of firm size into labor search models raises the question how wages are set when average and marginal product differ. We develop and analyze an alternative to the existing bargaining framework: Firms compete for labor by publicly posting long-term contracts. In such a competitive search setting, firms achieve faster growth not only by posting more vacancies, but also by offering higher lifetime wages that attract more workers which allows to fill vacancies with higher probability, consistent with empirical regularities. The model also captures several other observations about firm size, job flows, and pay. In contrast to bargaining models, efficiency obtains on all margins of job creation and destruction, both with idiosyncratic and aggregate shocks. The planner solution allows a tractable characterization which is useful for computational applications.
Author: Leo Kaas Publisher: ISBN: Category : Languages : en Pages : 57
Book Description
The introduction of firm size into labor search models raises the question how wages are set when average and marginal product differ. We develop and analyze an alternative to the existing bargaining framework: Firms compete for labor by publicly posting long-term contracts. In such a competitive search setting, firms achieve faster growth not only by posting more vacancies, but also by offering higher lifetime wages that attract more workers which allows to fill vacancies with higher probability, consistent with empirical regularities. The model also captures several other observations about firm size, job flows, and pay. In contrast to bargaining models, efficiency obtains on all margins of job creation and destruction, both with idiosyncratic and aggregate shocks. The planner solution allows a tractable characterization which is useful for computational applications.
Author: Adrien G. Bilal Publisher: ISBN: Category : Languages : en Pages : 0
Book Description
This paper develops a random-matching model of a frictional labor market with firm and worker dynamics. Multi-worker firms choose whether to shrink or expand their employment in response to shocks to their decreasing returns to scale technology. Growing entails posting costly vacancies, which are filled either by the unemployed or by employees poached from other firms. Firms also choose when to enter and exit the market. Tractability is obtained by proving that, under a parsimonious set of assumptions, all workers' and firm decisions are characterized by their joint marginal surplus, which in turn only depends on the firm's productivity and size. As frictions vanish, the model converges to a standard competitive model of firm dynamics which allows a quantification of the misallocation cost of labor market frictions. An estimated version of the model yields cross-sectional patterns of net poaching by firm characteristics (e.g., age and size) that are in line with the micro data. The model also generates a drop in job-to-job transitions as firm entry declines, offering an interpretation to U.S. labor market dynamics around the Great Recession. All these outcomes are a reflection of the job ladder in marginal surplus that emerges in equilibrium.
Author: Adrien Bilal Publisher: ISBN: Category : Business enterprises Languages : en Pages : 124
Book Description
This paper develops a random-matching model of a frictional labor market with firm and worker dynamics. Multi-worker firms choose whether to shrink or expand their employment in response to shocks to their decreasing returns to scale technology. Growing entails posting costly vacancies, which are filled either by the unemployed or by employees poached from other firms. Firms also choose when to enter and exit the market. Tractability is obtained by proving that, under a parsimonious set of assumptions, all workers' and firm decisions are characterized by their joint marginal surplus, which in turn only depends on the firm's productivity and size. As frictions vanish, the model converges to a standard competitive model of firm dynamics which allows a quantification of the misallocation cost of labor market frictions. An estimated version of the model yields cross-sectional patterns of net poaching by firm characteristics (e.g., age and size) that are in line with the micro data. The model also generates a drop in job-to-job transitions as firm entry declines, offering an interpretation to U.S. labor market dynamics around the Great Recession. All these outcomes are a reflection of the job ladder in marginal surplus that emerges in equilibrium.
Author: Shouyong Shi Publisher: ISBN: Category : Languages : en Pages : 54
Book Description
When there are search frictions in the labor market, physical capital accumulation by firms interacts with job dynamics. To study this interaction, this paper integrates directed, on-the-job search (OJS) into the neoclassical theory of firm investments, analytically characterizes the social optimum and quantitatively evaluates the model. The constrained social optimum features a continuous ladder of capital stocks across jobs and, hence, of labor productivity among homogeneous workers. Workers who are employed from unemployment optimally start at the bottom of the ladder. There is a socially efficient tradeoff between reducing unemployment and increasing labor productivity. Firm investments move a worker up the ladder continuously and OJS makes a worker jump up on the ladder in discrete steps. OJS is socially efficient when the capital stock is low, despite that job-to-job transition destroys an existing job. OJS is front-loaded and stops after a finite number of job switches. In contrast, investments by firms continue throughout a worker's employment. Moreover, investments are partially delayed when the capital stock is low, and so investments can be hump-shaped over tenure and over the capital stock. Calibration exercises show that the social optimum generates large frictional dispersion in labor productivity, significant returns to tenure, and persistently large costs of job loss.
Author: Hodaka Morita Publisher: ISBN: Category : Languages : en Pages : 31
Book Description
This paper explores a new model of firm dynamics that incorporates workers, their accumulation of specific human capital, and their mobility. A firm's production efficiency is determined by the levels of its managerial capability and its workers' firm-specific human capital in the model. Elaborating on the connection between firm dynamics and specific human capital, I show that the importance of managerial capability systematically influences firm dynamics and employment practices. The model offers a new perspective on the welfare consequences of apparently anticompetitive entry restrictions. By incorporating a government that can enforce entry regulations in the model, I demonstrate that entry restrictions can improve welfare by mitigating the underinvestment problem in specific human capital. The model's empirical and policy implications are also discussed.
Author: Alessandra Pizzo Publisher: ISBN: Category : Languages : en Pages : 0
Book Description
The objective underlying the three chapters of this thesis is the understanding of the functioning of the labor market to make a diagnosis about the potential regulatory role of a public authority in this market. ln the first chapter, I analyze, from a purely "positive" point of view, the ability of the model with search and matching frictions to reproduce short-term fluctuations of labor market variables in the United States. I propose a new calibration strategy, within a general equilibrium framework with sticky prices. In the second chapter (co-written with F. Langot), we study the determinants of changes in the labor supply over the last fifty years. Changes in the tax wedge, and two variables reflecting the institutional framework (the generosity of income in case of "non-employment" and workers' bargaining power), can explain the different trajectories of the rate employment and hours worked observed in the United States and three European economies (France, Germany and the United Kingdom). ln the third chapter, I analyze the performance of two alternative systems of social security, within the framework of a model with heterogeneous agents in terms of wealth. The agents are subject to a risk of unemployment, and the planner can provide insurance through a redistibutive tax system, based on a progressive tax and / or unemployment insurance. The progressive tax system is superior in terms of aggregate welfare to the insurance provided through unemployment benefits, through its effect on the functioning of the labor market.
Author: Leo Kaas
Author: Leo Kaas
Author: Adrien G. Bilal
Author: Adrien Bilal
Author: Leo Kaas
Author: Shouyong Shi
Author: Leo Kaas
Author: Felix Reichling
Author: Hodaka Morita
Author: Alessandra Pizzo
Author: Bihemo Francis Kimasa