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Baktash, Mehrzad B. (2026): Overeducation, performance pay and wages: evidence from Germany. In: Education Economics, Jg. 34, H. 4, S. 529-549. DOI:10.1080/09645292.2025.2546445

Abstract

"Overeducated workers are more productive and have higher wages in comparison to their adequately educated coworkers in the same jobs. However, they have lower wages than their similarly educated peers who are in correctly matched jobs. This study examines the hypotheses that overeducated workers sort into performance pay jobs as an adjustment mechanism and that performance pay enhances their wages. Using the SOEP, I show that overeducation associates with a higher likelihood of sorting into performance pay jobs and that performance pay significantly improves the wages of overeducated workers. The findings hold in endogenous switching regressions and several robustness checks." (Author's abstract, IAB-Doku) ((en))

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Bauer, Anja & Enzo Weber (2026): Decomposing Variations in Labor Market Mismatch. (IAB-Discussion Paper 03/2026), Nürnberg, 19 S. DOI:10.48720/IAB.DP.2603

Abstract

"Dieses Diskussionspapier zeigt, wie Veränderungen des Arbeitsmarkt-Mismatch auf die Komponenten Arbeitslosigkeit, offene Stellen und Matchingeffizienz zurückgeführt werden können. Wir stellen fest, dass die Arbeitslosigkeit der wichtigste Faktor ist und auch die zyklischen Schwankungen bestimmt, während die Beiträge der offenen Stellen geringer und antizyklisch sind. Wir unterscheiden nach der Ursache der Arbeitslosigkeit und zeigen, dass Ströme gegenüber der Beschäftigung den Mismatch verstärken, während dies für Nichtbeschäftigung und Ausbildung / Weiterbildung nicht der Fall ist." (Autorenreferat, IAB-Doku)

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Bischof, Stephan & Rolf van der Velden (2026): Wage effects of skill mismatches across domains: the importance of ICT skills. In: Oxford economic papers, Jg. 78, H. 2, S. 388-409. DOI:10.1093/oep/gpag001

Abstract

"To date, it is unclear in which skills mismatches are most relevant for individuals’ wages, and whether surpluses or deficits in one domain can offset those in another. This study addresses these gaps by examining how mismatches in five key skill domains (ICT, reading, mathematics, science, and reasoning) are linked to individuals’ wages. Utilizing data from the 2016 wave of the German National Educational Panel Study (NEPS) Adult Cohort, our findings reveal that skill deficits consistently result in lower wages, whereas surpluses do not pay off in each domain. Notably, mismatches in ICT skills are most significant for individuals’ wages: ICT deficits not only reduce wages, but can also negate wage benefits from surpluses in other skills. Conversely, ICT surpluses can compensate for wage penalties associated with deficits in other domains. These findings underscore the importance of digital skills for productivity and wage potential in the modern labour market." (Author's abstract, IAB-Doku) ((en))

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Drasch, Katrin & Gerhard Krug (2026): Finding a job through social networks: monetary and nonmonetary returns for employed and unemployed job seekers. In: European Societies, S. 1-28. DOI:10.1162/euso.a.106

Abstract

"This study examines the impact of job vacancy information obtained through personal contacts on monetary and nonmonetary job search outcomes. We hypothesise that the effects will be positive for both kinds of outcome, and that these effects may depend on employment status prior to finding a new job. Additionally, we hypothesise that information from professional personal contacts will lead to better job search outcomes than information from private personal contacts. We use panel data from the German Panel Study “Labour Market and Social Security” (PASS) and fixed effects regressions to test these hypotheses. Monetary outcomes are measured by wages and nonmonetary outcomes by job satisfaction. Overall, we find that the employed tend to benefit more than the unemployed. However, the specific pattern differs depending on whether vacancy information stems from personal or professional contacts and on the type of outcome (monetary or nonmonetary)." (Author's abstract, IAB-Doku) ((en))

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Galos, Diana Roxana & Joris Frese (2026): Online social class cues and employability: Experimental evidence from Germany. In: Social science research, Jg. 133. DOI:10.1016/j.ssresearch.2025.103258

Abstract

"Social media platforms, such as Twitter or Instagram, offer easily accessible information – relevant or not – for employers when evaluating candidates for a position. In particular, they tend to be sources of information about individuals’ interests and leisure activities.Because interests are highly stratified by social class (e.g., engagement in highbrow and lowbrow activities), this represents a new way for class to potentially manifest itself in the hiring process. To study discrimination in hiring based on online social class cues, we conducted a pre-registered survey experiment in Germany with samples of employers and non-employers, manipulating job applicants’ class cues on social media(highbrow versus lowbrow). Overall, we found no difference in preferences for the candidates displaying highbrow and lowbrow activities on their social media profiles. However, this masks important differences in the specific activities proxying for class. When these activities have no relevance for the jobs in question, higher-class candidates are preferred. Exploratory analyses show that respondents are more likely to express positive sentiments toward the higher-class profiles, with highbrow activities being positively associated with work-related traits. Our findings highlight the need to consider how digital environments and, more specifically, online social class cues, may contribute to class bias in hiring." (Author's abstract, IAB-Doku, © 2025 The Authors. Published by Elsevier Inc.) ((en))

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Goller, Daniel, Enzo Brox & Stefan C. Wolter (2026): Imperfect Self-knowledge about Skills and Skill Mismatch. (Working paper / Swiss Leading House 253), Zürich, 40 S., App.

Abstract

"Why do young people sort into poorly fitting occupations? This paper shows that imperfect self-knowledge about skills is an important source of skill mismatch at labor market entry. We use unique data from standardized professional aptitude tests linked to administrative records on educational trajectories and early labor market outcomes in Switzerland. The data allow us to observe objective skills and subjective skill beliefs for many productivity-relevant skills in a high-stakes setting. We document large differences among individuals in how well their beliefs align with their skills. Imperfect self-knowledge predicts misaligned occupational aspirations, higher realized skill mismatch, and a higher probability of dropout. Guided by a Roy-style model of occupational choice with imperfect self-knowledge, we interpret these findings as evidence that distorted self-assessments at the school-to-work transition contribute to the misallocation of talent." (Author's abstract, IAB-Doku) ((en))

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Hartl, Tobias, Christian Hutter & Enzo Weber (2026): Matching for three: The search activities of workers, firms, and employment services. In: Economic Modelling, Jg. 155, 2025-12-08. DOI:10.1016/j.econmod.2025.107434

Abstract

"The standard labour market matching function neglects a substantial variation of hirings. A crucial driver of this latent part is the search intensity of job seekers and firms, as well as the placement intensity of employment agencies. However, there is still a lack of integration of all three search and placement intensities into a unified theoretical framework. Their combined labour market effects have not been estimated so far. We feed all three intensities into the theoretical framework of a labour market matching function to estimate their impact on the job finding rate – effects which are not settled a priori. This could provide important stylised facts for subsequent theory building. For measuring the search and placement intensities, we use big data on online activity obtained from the job exchange of the German Federal Employment Agency and from its internal placement-software. The results show that all three intensities significantly contribute to the variation in job findings beyond vacancies and unemployment. During the COVID-19 crisis, reduced search intensities accounted for 44 percent of lost hirings and 16 percent of the labour market related increase in unemployment." (Author's abstract, IAB-Doku, © 2025 Elsevier) ((en))

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Jungbauer, Thomas (2026): Strategic Wage Posting, Market Power, and Mismatch. In: Journal of labor economics, Jg. 44, H. 2, S. 481-514. DOI:10.1086/733046

Abstract

"This paper analyzes the effects of firms posting multiple but varying number of vacancies, hence differing in their market power, in professional labor markets. I find that strategic wage Posting does, in general, not result in an efficient assignment of workers to firms. This is because firms with a larger number of vacancies pay on average lower wages than their competitors due to alack of within-firm rivalry. If highly productive firms hire more, the resulting welfare loss dueto mismatch may be substantial. Moreover, I provide a potential explanation why firms postuniform wages, missing out on more-skilled workers." (Author's abstract, IAB-Doku) ((en))

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Börschlein, Erik-Benjamin (2025): Essays on Wages and Minimum Wages in Frictional Labor Markets. 237 S. DOI:10.5283/epub.76880

Abstract

"In Deutschland ist das Zusammenspiel zwischen Löhnen und institutionellen sowie marktbedingten Friktionen ein zentrales Thema wirtschaftspolitischer Debatten. Diese Dissertation untersucht in drei empirischen Studien kausale Zusammenhänge zwischen Löhnen und Mindestlöhnen, Matchingfriktionen und Arbeitsmarktanspannung. Die Analysen basieren auf umfangreichen administrativen Daten der Bundesagentur für Arbeit und nutzen fortgeschrittene ökonometrische Methoden zur kausalen Inferenz. Die ersten beiden Kapitel betrachten institutionelle Effekte – insbesondere die Einführung des gesetzlichen Mindestlohns im Jahr 2015 – während das dritte Kapitel den Fokus auf veränderte Marktbedingungen legt, insbesondere den zunehmenden Fachkräftemangel. Ziel ist es, die Wirkungsmechanismen zwischen Löhnen und Arbeitsmarktfriktionen differenziert darzustellen. Kapitel 1 Dieses Kapitel entwickelt einen innovativen Machine-Learning-Ansatz zur verbesserten Schätzung langfristiger Lohneffekte des Mindestlohns. Übliche Studien basieren auf einem fixen Pre-Treatment-Indikator („Bite“), basierend auf Löhnen vor der Politikmaßnahme, der die Betroffenheit von der Mindestlohneinführung nur kurzfristig akkurat abbildet. Um langfristige dynamische Veränderungen zu erfassen, werden hier ein zeitvariable Bite-Indikatoren mittels LASSO-basierter Vorhersagemodelle konstruiert, welche die Inzidenz und die Intensität der Mindestlohnbetroffenheit abbilden. Basierend auf administrativen Daten der Jahre 2010–2014 wird die Mindestlohnbetroffenheit für den Zeitraum 2015–2020 vorhergesagt. In der anschließenden Differenz-von-Differenzen-Analyse zeigen sich signifikant positive Lohneffekte, die im Vergleich zu herkömmlichen Methoden jedoch geringer ausfallen und über die Zeit konstant bleiben. Die Ergebnisse deuten darauf hin, dass traditionelle Evaluierungen die Effekte überschätzen könnten, da sie dynamische Selektionseffekte und mindestlohnunabhängige Lohnentwicklungen nicht ausreichend berücksichtigen. Kapitel 2 In diesem Kapitel wird untersucht, wie sich die Einführung des Mindestlohns auf offene Stellen und damit verbundene Friktionen im Matching-Prozess ausgewirkt hat. Die Analyse basiert auf administrativen Vakanzdaten und Erwerbsbiographien. Die Analyse erfolgt auf der Berufsebenen für den Zeitraum 2013–2019 und nutzt ein Differenz-von-Differenzen-Design. Die Ergebnisse zeigen, dass die Anzahl neu gemeldeter Stellen durch die Mindestlohneinführung insgesamt nicht zurückging. Jedoch stieg der Anteil stornierter Vakanzen um 4–9 Prozent, und die Dauer erfolgreicher Besetzungsprozesse erhöhte sich um 5–6 Prozent. Dies deutet auf verstärkte Such- und Matchingfriktionen hin, etwa durch höhere Einstellungsstandards oder reduzierte berufliche Mobilität. Ergänzende Analysen zeigen geringere Übergänge zwischen Arbeitgebern, insbesondere bei Berufswechseln. Somit wird deutlich, dass die Mindestlohneinführung zwar nur geringe Auswirkungen auf die Beschäftigung hatte, aber dennoch Matchingprozesse erheblich beeinflusst hat. Kapitel 3 Dieses Kapitel wechselt die Perspektive und untersucht, wie zunehmende Arbeitsmarktanspannung – gemessen als Verhältnis von offenen Stellen zu Arbeitssuchenden – die Lohnentwicklung beeinflusst hat. Mithilfe eines Leave-One-Out-Instruments wird der kausale Effekt lokaler Arbeitsmarktanspannung in beruflichen Arbeitsmärkten auf Löhne geschätzt. Die Ergebnisse zeigen moderate, aber signifikant positive Lohneffekte, die etwa 7–19 Prozent des realen Lohnwachstums in Deutschland zwischen 2012 und 2022 erklären. Besonders stark profitieren neu Eingestellte, Hochqualifizierte, Beschäftigte im Dienstleistungssektor und Arbeitnehmer in Ostdeutschland. Zudem steigt der Lohn in Niedriglohnunternehmen überdurchschnittlich stark, was auf eine Verringerung der Lohnungleichheit hindeutet. Im Gesamtfazit werden die Erkenntnisse der drei Studien zusammengeführt. Die Arbeit zeigt, wie institutionelle Eingriffe wie der Mindestlohn einerseits Löhne anheben, gleichzeitig aber neue Friktionen erzeugen können. Andererseits können veränderte Marktbedingungen auch ohne staatliche Eingriffe Löhne steigern – wie etwa bei hoher Arbeitsmarktanspannung. Methodisch hebt die Dissertation die Bedeutung administrativer Mikrodaten und robuster kausaler Analyseverfahren in der Arbeitsmarktforschung hervor." (Autorenreferat, IAB-Doku)

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Carlini, Giacomo (2025): Essays in Macroeconomics and Labor Economics. 147 S.

Abstract

"The first chapter investigates why assortative matching between workers and firms is stronger in large cities than in small cities. I develop a search and matching model with heterogeneous workers and firms to examine how worker composition and labor market frictions affect sorting. Calibrating the model to German employer-employee data, I find that matching efficiency is key to explaining differences in assortative matching across cities. This effect is amplified by a more dispersed worker productivity dispersion. The model shows that around 5% of the GDP gap between large and small cities is attributable to differences in assortative matching, underscoring the role of local labor market frictions and productivity distributions in spatial inequality. The second chapter explores how task-biased technological adoption affects GDP gaps across countries. We introduce a country-specific measure of task intensity and document that as GDP increases, routine work declines while cognitive work rises. Moreover, differences in task content within occupations explain over half of the cross-country differences in routine work. Using a production framework where technology is task-specific and occupations are aggregates of tasks, we estimate task-specific productivities across countries. A counterfactual exercise suggests that reducing dispersion in task-biased technology adoption could shrink the average GDP gap with the United States by 25%. The third chapter examines sectoral labor productivity growth in the U.S. over 50 years, highlighting routine- and skill-biased technical change. I show that routine labor productivity has grown fastest, with skill-biased technical change benefiting skilled workers while unskilled productivity declined, especially in services. Finally, to disentangle the role of different labor-augmenting technological change, I extend the framework to account for heterogeneity in both occupations and skills." (Author's abstract, IAB-Doku) ((en))

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Corradini, Carlo, David Morris & Enrico Vanino (2025): Marshallian agglomeration, labour pooling and skills matching. In: Cambridge Journal of Economics, Jg. 49, H. 3, S. 527-557. DOI:10.1093/cje/beaf010

Abstract

"Better skills matching has long been proposed as one of the key advantages of agglomeration economies. Yet, support for this improved matching has remained largely founded upon indirect proxies for skills such as wages and education. This paper contributes to the literature by offering novel empirical evidence on the relationship between specific measures of localised skills deficiencies and agglomeration economies, in the form of industrial density. Developing an instrumental variable approach and controlling for unobserved heterogeneity and other region-industry idiosyncratic effects across a panel dataset for the period 2009–2019 in England and Wales, our analysis reveals a positive effect of agglomeration economies in reducing both skills gaps within the employed workforce and skills shortages in the labour market external to the firm. We consider these findings in the context of persistent regional imbalances and the importance of strengthening skills provision within current regional industrial strategies." (Author's abstract, IAB-Doku) ((en))

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Garibaldi, Pietro, Pedro Gomes & Thepthida Sopraseuth (2025): Output costs of education and skill mismatch in OECD countries. In: Economics Letters, Jg. 250. DOI:10.1016/j.econlet.2025.112278

Abstract

"We quantify the output costs of education and skills mismatch for 17 OECD economies, using a calibrated model of vertical mismatch. Eliminating the frictions generating mismatch would raise output by 3% to 4% on average, varying between 0.5% to 9% across countries. Although the education and skill mismatch measures are constructed using different methods and differ in size, the output costs are similar between the two measures." (Author's abstract, IAB-Doku, © 2025 The Authors. Published by Elsevier B.V.) ((en))

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Naraidoo, Ruthira & Juan Paez-Farrell (2025): Business cycle models with labour market frictions: the role of the matching function. (Sheffield economic research paper series / The University of Sheffield, Department of Economics 2025006), Sheffield, 25 S.

Abstract

"Standard business cycle models with search and matching frictions in the labour market increasingly rely on the assumption that firms face hiring, as opposed to, search costs in recruiting workers. We show that although this modification im-proves the model's empirical performance, it causes the matching function to play no role in macroeconomic dynamics. Assuming both costs can overcome this short-coming but for reasonable parameter values it implies that matching efficiency shocks have no effects." (Author's abstract, IAB-Doku) ((en))

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Platonov, Konstantin (2025): Post-pandemic recovery: Search and matching, market power, and endogenous labor demand. In: Economic Modelling, Jg. 151. DOI:10.1016/j.econmod.2025.107183

Abstract

"Following the COVID-19 pandemic, United States (US) output rebounded quickly, labor productivity rose above pre-pandemic levels, profit rates increased, and the labor market tightened, all despite high unemployment. These observations can be reconciled in a search and matching model of the labor market with two new assumptions of strong firm market power and endogenous labor demand. Market power encourages firm entry when prices rise, while endogenous labor demand enables firms to adapt to shocks rather than shut down. Two regimes arise: one with weak market power, representing the pre-pandemic era and another with strong market power, explaining the post-pandemic recovery. Under strong market power, firm entry drives recovery following recessions, the labor market becomes tight, wages and producer prices rise, and the average firm size shrinks, which is consistent with the post-pandemic data. This study demonstrates how a typical business cycle can be reconciled with US post-pandemic recovery within a unified model, highlighting the non-trivial role of firms’ market power in shaping macroeconomic outcomes." (Author's abstract, IAB-Doku, © 2025 The Author. Published by Elsevier B.V.) ((en))

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Sharma, Prateek (2025): Job market signalling: game theory and bidding strategies. In: Applied Economics Letters, S. 1-5. DOI:10.1080/13504851.2025.2570861

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Smith, Eric (2025): On-the-job wage dynamics. In: Journal of Economic Theory, Jg. 224. DOI:10.1016/j.jet.2024.105953

Abstract

"This paper assesses wage setting and wage dynamics in a search and matching framework where (i) workers and firms on occasion can meet multilaterally; (ii) workers can recall previous encounters with firms; and (iii) firms cannot commit to future wages and workers cannot commit to not searching in the future. The resulting progression of wages (from firms paying just enough to keep their workers) yields a compensation structure consistent with well established but difficult to reconcile observations on pay dynamics within jobs at firms. Along with wage tenure effects, serial correlation in wage changes and wage growth are negatively correlated with initial wages." (Author's abstract, IAB-Doku, © 2025 The Author. Published by Elsevier Inc.) ((en))

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Tran Nhat, Diana & Timm Teubner (2025): Expectation vs. reality: How stereotypes and expectation disconfirmation affect job evaluations in online labor markets. In: PLoS ONE, Jg. 20, H. 11. DOI:10.1371/journal.pone.0334630

Abstract

"In online labor markets, reputation determines both job opportunities and pay and even small disparities can translate into significant economic differences. While gender-related bias in reputational metrics such as likes, reviews, and ratings has been empirically documented, the mechanisms through which they arise remain insufficiently understood. This study presents results from an online experiment, varying workers’ gender, domain, and performance, to investigate how expectations about workers are formed and how they affect subsequent evaluations. Drawing on Expectation Disconfirmation Theory and Role Congruity Theory, we test whether the effect of disconfirmation (i.e., discrepancies between expected and actual performance) on evaluations varies with congruity (i.e., stereotypical fit between gender and domain). Contrary to our hypothesis, workers in congruent settings do not elicit higher expectations than those in incongruent roles. Similarly, the effect of positive and negative disconfirmation does not vary with congruity. However, exploratory analyses suggest that congruity does affect expectations and evaluations when individuals hold strong gender-domain associations. In case of stereotypical associations, individuals expect higher performance of workers in congruent domains and evaluate them more leniently if they fail to meet expectations. Our findings contribute to understanding why identical performances might be judged differently depending on gender-domain associations, expectations, and disconfirmation." (Author's abstract, IAB-Doku) ((en))

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Abbritti, Mirko & Agostino Consolo (2024): Labour market skills, endogenous productivity and business cycles. In: European Economic Review, Jg. 170. DOI:10.1016/j.euroecorev.2024.104873

Abstract

"This paper analyses how labor market heterogeneity affects unemployment, productivity and business cycle dynamics. To this aim, we set up a model with asymmetric search and matching frictions across skilled and unskilled workers, and endogenous productivity through R&D investment and intangible capital accumulation. Skill mismatch and skill-specific labor market institutions have three main effects on business cycles and growth dynamics. First, the relative scarcity of skilled workers increases the natural rate of unemployment and reduces total factor productivity with long-run effects on the growth rate of output. Second, skill heterogeneity in the labor market generates asymmetric outcomes and amplifies measures of employment, wages and consumption inequality. Finally, the model provides important insights for the Phillips and Beveridge curves. Incorporating skill heterogeneity leads to a flattening of the Phillips curve as wages and unemployment respond unevenly across skill types. Also, the model generates sideward shifts of the Beveridge curve following business cycle shocks, with the extent of these shifts depending on the degree of skill heterogeneity." (Author's abstract, IAB-Doku, © 2024 Elsevier) ((en))

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Baley, Isaac, Lars Ljungqvist & Thomas J. Sargent (2024): Returns to labour mobility. In: The Economic Journal, Jg. 135, H. 666, S. 430-454. DOI:10.1093/ej/ueae054

Abstract

"Returns to labor mobility have too often escaped the attention they deserve as conduits of important forces in macro-labour models. These returns are shaped by calibrations of productivity processes that use theoretical perspectives and data sources from (i) labour economics and (ii) industrial organization. By investigating earlier prominent studies, we conclude that the focus on firm size dynamics and shocks intermediated through neo-classical production functions in (ii) yields large returns to labor mobility that are robust to parameter perturbations. In contrast, the reliance on statistics in labor economics to calibrate per-worker productivity processes in (i) can give rise to fragilities in the sense that parameter perturbations that generate similar targeted statistics can have very different implications for returns to labor mobility." (Author's abstract, IAB-Doku) ((en))

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Behaghel, Luc, Sofia Dromundo, Marc Gurgand, Yagan Hazard & Thomas Zuber (2024): The Potential of Recommender Systems for Directing Job Search: A Large-Scale Experiment. (IZA discussion paper / Forschungsinstitut zur Zukunft der Arbeit 16781), Bonn, 65 S.

Abstract

"We analyze the employment effects of directing job seekers' applications toward establishments likely to recruit. We run a two-sided randomization design involving about 800,000 job seekers and 40,000 establishments, based on an empirical model that recommends each job seeker to firms so as to maximize total potential employment. Our intervention induces a 1% increase in job finding rates for short term contracts. This impact comes from a targeting effect combining (i) a modest increase in job seekers' applications to the very firms that were recommended to them, and (ii) a high success rate conditional on applying to these firms. Indeed, the success rate of job seekers' applications varies considerably across firms: the efficiency of applications sent to recommended firms is 2.7 times higher than the efficiency of applications to the average firm. This suggests that there can be substantial gains from better targeting job search, leveraging firm-level heterogeneity." (Author's abstract, IAB-Doku) ((en))

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Belot, Michèle, Xiaoying Liu & Vaios Triantafyllou (2024): Measuring the quality of a match. In: Labour Economics, Jg. 89. DOI:10.1016/j.labeco.2024.102568

Abstract

"The quality of an employment match is a central concept in labor economics. It is relevant for evaluating the welfare impact of labor market policies, and for our understanding of labor market dynamics. This paper reviews the challenges associated with measuring match quality. We first review measures commonly used in the literature, their advantages, and drawbacks. We then present novel evidence from a survey sample of US employees where alternative measures were collected simultaneously. We show that while some of these measures correlate well, others do not. Finally, we present additional partial evidence on the correlations between measures based on the National Longitudinal Survey of Youth (NLSY79), a substantially larger and nationally representative survey. The takeaway message is a word of caution regarding the interpretation of some of these measures and specific concerns regarding using wages and tenure as indicators of match quality." (Author's abstract, IAB-Doku, © 2024 Elsevier) ((en))

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Bernstein, Joshua, Michael Plante, Alexander W. Richter & Nathaniel A. Throckmorton (2024): A Simple Explanation of Countercyclical Uncertainty. In: American Economic Journal. Macroeconomics, Jg. 16, H. 4, S. 143-171. DOI:10.1257/mac.20220134

Abstract

"This paper documents that labor search and matching frictions generate countercyclical uncertainty because the inherent nonlinearity in the flow of new matches makes employment uncertainty increasing in the number of people searching for work. Quantitatively, this mechanism is strong enough to explain uncertainty and real activity dynamics, including their correlation. Through this lens, uncertainty fluctuations are endogenous responses to changes in real activity that neither affect the severity of business cycles nor warrant policy intervention, in contrast with leading theories of the interaction between uncertainty and real activity dynamics." (Author's abstract, IAB-Doku) ((en))

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Birchenall, Javier A. (2024): A competitive theory of mismatch. In: Journal of Economic Dynamics and Control, Jg. 168. DOI:10.1016/j.jedc.2024.104996

Abstract

"I study the distributions of unemployment, vacancies, and wages across local labor markets in an economy where workers and jobs are matched and mismatched based on more explicit assumptions and aggregation principles than in the reduced-form aggregate matching-function approach. The endogenous matching process formulated here is flexible and has practical value for applied work. Local and aggregate labor market adjustments to local productivity and aggregate demand shocks reproduce empirical Beveridge and wage curve patterns, offer an alternative perspective on empirical indices of mismatch unemployment, and deliver an endogenous and commonly used reduced-form aggregate matching function." (Author's abstract, IAB-Doku, © 2024 Elsevier B.V. All rights are reserved, including those for text and data mining, AI training, and similar technologies.) ((en))

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Braunschweig, Luisa, Wolfgang Dauth & Duncan Roth (2024): Job Mobility and Assortative Matching. (IAB-Discussion Paper 11/2024), Nürnberg, 52 S. DOI:10.48720/IAB.DP.2411

Abstract

"Wir analysieren, wie sich das Matching zwischen Betrieben und Beschäftigten über das Erwerbsleben durch Jobmobilität verändert. Wir nutzen deutsche administrative Daten, die sowohl Informationen über Beschäftigte als auch Betriebe enthalten. Um assortatives Matching zu messen, berechnen wir die Korrelation zwischen zeitkonstanten Lohnkomponenten von Betrieben und Beschäftigten, welche wir aus einer Lohndekomposition im Stil von Abowd/Kramarz/Margolis (1999) ziehen. Zudem benutzen wir ein neues Maß für assortatives Matching, welches auf der Distanz zwischen diesen Lohnkomponenten basiert. Beide Maße zeigen, dass der Grad des assortativen Matchings im Durchschnitt mit jedem weiteren Betriebswechsel ansteigt. Bei Beschäftigten mit einer hohen zeitkonstanten Lohnkomponente kann dies durch Job Ladder Modelle erklärt werden, denn die Beschäftigten bewegen sich zu Firmen mit höheren Lohnkomponenten. Dahingegen sind Beschäftigte mit niedrigerer Lohnkomponente am Anfang des Erwerbslebens in weniger assortativen Matches zu finden, da sie es ebenfalls schaffen, zu Beginn die Job Ladder hinaufzuklettern. Für sie beginnt der Anstieg des assortativen Matchings erst nach dem dritten Job, wenn sie von der Job Ladder fallen. Die Entwicklung des assortativen Matchings ist zudem relevant für die Lohnungleichheit im Lebensverlauf. Wir zeigen, dass der Anstieg des assortativen Matchings circa 25 Prozent des Anstiegs der Lohnungleichheit im Lebensverlauf erklären kann." (Autorenreferat, IAB-Doku)

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Cowgill, Bo, Jonathan M. V. Davis, B. Pablo Montagnes & Patryk Perkowski (2024): Stable Matching on the Job? Theory and Evidence on Internal Talent Markets. (CESifo working paper 11120), München, 47, XLIII S.

Abstract

"A principal often needs to match agents to perform coordinated tasks, but agents can quit or slack off if they dislike their match. We study two prevalent approaches for matching within organizations: Centralized assignment by firm leaders and self-organization through market-like mechanisms. We provide a formal model of the strengths and weaknesses of both methods under different settings, incentives, and production technologies. The model highlights tradeoffs between match-specific productivity and job satisfaction. We then measure these tradeoffs with data from a large organization’s internal talent market. Firm-dictated matches are 33% more valuable than randomly assigned matches within job categories (using the firm’s preferred metric of quality). By contrast, preference-based matches (using deferred acceptance) are only 5% better than random but are ranked (on average) about 38 percentiles higher by the workforce. The selforganized match is positively assortative and helps workers grow new skills; the firm’s preferred match is negatively assortative and harvests existing expertise." (Author's abstract, IAB-Doku) ((en))

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Cubas, German, Pedro Silos & Vesa Soini (2024): Risk and the allocation of talent in the Roy model. In: Economics Letters, Jg. 236. DOI:10.1016/j.econlet.2024.111623

Abstract

"With risk-averse workers and uninsurable earnings shocks, competitive markets allocate too few workers to risky jobs. Using an equilibrium Roy model with incomplete markets, we show that in competitive equilibrium, risky occupations are inefficiently small and hence talent is misallocated." (Author's abstract, IAB-Doku, © 2024 Elsevier) ((en))

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Darougheh, Saman (2024): Occupation-Industry Mismatch in the Cross Section and the Aggregate. In: Journal of Political Economy Macroeconomics, Jg. 2, H. 3, S. 375-408. DOI:10.1086/731536

Abstract

"I define occupations that are employed in more industries as “broader ” occupations. I study the implications of broadness for mismatch of the unemployed and vacancies across occupations and industries. I empirically find that workers in broader occupations are better insured against industry specific shocks. A recent literature has found that mismatch did not significantly contribute to the rise in unemployment during the Great Recession. I build a general equilibrium model that uses occupational broadness as a microfoundation of mismatch. The model uncovers a general equilibrium channel that realigns the strong crosssectional effects of mismatch with its missing aggregate impact. I argue that mismatch across occupations and industries cannot significantly contribute to aggregate unemployment fluctuations" (Author's abstract, IAB-Doku) ((en))

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Duffy, John & Brian C. Jenkins (2024): Search, unemployment, and the Beveridge curve: Experimental evidence. In: Labour Economics, Jg. 87. DOI:10.1016/j.labeco.2024.102518

Abstract

"We report on a laboratory experiment testing the predictions of the Diamond–Mortensen–Pissarides (DMP) search-and-matching model, which is a workhorse, decentralized model of unemployment and the labor market. We focus on the job vacancy posting problem that firms face in the DMP model. We explore the model’s comparative statics predictions concerning variations in the separation rate, the vacancy posting cost, and the firm’s surplus earned per employee. Across all treatments, we find strong evidence for an inverse relationship between vacancies and unemployment, consistent with the Beveridge curve. We also find that the results of our various comparative statics exercises are in-line with the predictions of the theory." (Author's abstract, IAB-Doku, © 2024 Elsevier) ((en))

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Fongoni, Marco (2024): Asymmetric Reciprocity and the Cyclical Behavior of Wages, Effort, and Job Creation. In: American Economic Journal. Macroeconomics, Jg. 16, H. 3, S. 52-89. DOI:10.1257/mac.20200321

Abstract

"This paper develops a search and matching framework in which workers are characterized by asymmetric reference-dependent reciprocity and firms set wages by considering the effect that these can have on workers’ effort and, therefore, on output. The cyclical response ofeffort to wage changes can considerably amplify shocks, independently of the cyclicality of the hiring wage, which becomes irrelevant for unemployment volatility, and firms’ expectations of downward wage rigidity in existing jobs increases the volatility of job creation. The model is consistent with evidence on hiring and incumbents’ wage cyclicality, and provides novel predictions on the dynamics of effort." (Author's abstract, IAB-Doku) ((en))

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Lochner, Benjamin & Bastian Schulz (2024): Firm Productivity, Wages, and Sorting. In: Journal of labor economics, Jg. 42, H. 1, S. 85-119., 2022-09-13. DOI:10.1086/722564

Abstract

"We study the link between firm productivity and the wages that firms pay. Guided by a search-matching model with large firms, worker and firm heterogeneity, and production complementarities, we infer firm productivity by estimating firm-level production functions. Using German data, we find that the most productive firms do not pay the highest wages. Worker transitions from high- to medium-productivity firms are on average associated with wage gains. Productivity sorting, that is, the sorting of high-ability workers into high-productivity firms, is less pronounced than the sorting into high-wage firms." (Author's abstract, IAB-Doku, © University of Chicago Press) ((en))

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Mühlbauer, Sabrina & Enzo Weber (2024): Predicting Job Match Quality: A Machine Learning Approach. (IAB-Discussion Paper 09/2024), Nürnberg, 25 S. DOI:10.48720/IAB.DP.2409

Abstract

"Dieses Papier beschäftigt sich mit einer groß angelegten Datenanalyse um die Matching‑Qualität auf dem Arbeitsmarkt zu untersuchen. Hierfür verwenden wir einen sehr umfangreichen administrativen Datensatz zu Arbeitsmarktbiographien in Deutschland. Die Schätzungen werden sowohl mit maschinellem Lernen (extreme gradient boosting), als auch mit traditionellen statistischen Methoden (OLS, logit) durchgeführt. Bei der Gegenüberstellung beider Methoden wird deutlich, dass maschinelles Lernen insbesondere in den Bereichen Mustererkennung, Analyse von sehr großen Datensätzen und Minimierung der Fehlerrate deutliche Vorteile gegenüber den herkömmlichen Methoden aufweist. Schließlich werden die Prognosen für Matching‑Qualität (Stabilität und Löhne) mit Matching‑Wahrscheinlichkeiten kombiniert. Anhand dieser Ergebnisse wird für jede arbeitssuchende Person eine Liste mit Berufsvorschlägen generiert. Damit können Arbeitsvermittlern und Arbeitssuchenden Alternativen aufgezeigt werden, wodurch sich ihr Suchverhalten auf dem Arbeitsmarkt erweitern könnte." (Autorenreferat, IAB-Doku)

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Ziegler, Lennart (2024): Skill Demand and Wages: Evidence From Linked Vacancy Data. In: Benjamin Elsner; Solomon W. Polachek (eds.) (2024): Big Data Applications in Labor Economics, Part B, Cheltenham, S. 101-130. DOI:10.1108/S0147-91212024000052B025

Abstract

"This study provides new evidence on skill requirements in the labor market and shows to what extent skill demand is associated with wages and vacancy duration. In a sample of more than 1.5 million job postings administered by the Austrian public employment service, I identify the most common skill requirements mentioned in job descriptions. Accounting for a broad set of detailed job characteristics, there exists a robust association between the number of skill requirements and wages. In particular, jobs with many skill requirements pay substantially higher wages. While I estimate large effects for managerial and analytical skills, associations with most soft skills are small. Employers also need longer to fill vacancies with many skill requirements. Robustness tests show that measurement error is unlikely to explain these results and that the estimates can be replicated using vacancy postings from another job board." (Author's abstract, IAB-Doku, © Emerald) ((en))

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Barlevy, Gadi, Bart Hobijn, Jason Faberman & Ayşegül Şahin (2023): The Shifting Reasons for Beveridge-Curve Shifts. (IZA discussion paper / Forschungsinstitut zur Zukunft der Arbeit 16517), Bonn, 29 S.

Abstract

"We discuss how the relative importance of factors that contribute to movements of the U.S. Beveridge curve has changed from 1960 to 2023. We review these factors in the context of a simple flow analogy used to capture the main insights of search and matching theories of the labor market. Changes in inflow rates, related to demographics, accounted for Beveridge curve shifts between 1960 and 2000. A reduction in matching efficiency, that depressed unemployment outflows, shifted the curve outwards in the wake of the Great Recession. In contrast, the most recent shifts in the Beveridge curve appear driven by changes in the eagerness of workers to switch jobs. We argue that, while the Beveridge curve is a useful tool for relating unemployment and vacancies to inflation, the link between these labor market indicators and inflation depends on whether and why the Beveridge curve shifted. Therefore, a careful examination of the factors underlying movements in the Beveridge curve is essential for drawing policy conclusions from the joint behavior of unemployment and job openings." (Author's abstract, IAB-Doku) ((en))

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Bassier, Ihsaan, Alan Manning & Barbara Petrongolo (2023): Vacancy duration and wages. (CEP discussion paper / Centre for Economic Performance 1943), London, 45 S.

Abstract

"We estimate the elasticity of vacancy duration with respect to posted wages, using data from the near-universe of online job adverts in the United Kingdom. Our research design identifies duration elasticities by leveraging firm-level wage policies that are plausibly exogenous to hiring difficulties on specific job vacancies, and control for job and market-level fixed-effects. Wage policies are defined based on external information on pay settlements, or on sharp, internally-defined, firm-level changes. In our preferred specifications, we estimate duration elasticities in the range −3 to −5, which are substantially larger than the few existing estimates." (Résumé d'auteur, IAB-Doku) ((en))

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Carillo-Tudela, Carlos, Leo Kaas & Benjamin Lochner (2023): Matching Through Search Channels. (IAB-Discussion Paper 10/2023), Nürnberg, 85 S. DOI:10.48720/IAB.DP.2310

Abstract

"Firmen und Arbeitnehmer/-innen finden überwiegend über Stellenanzeigen, persönliche Kontaktnetzwerke oder die Bundesagentur für Arbeit zueinander. All diese Suchkanäle tragen dazu bei, Friktionen am Arbeitsmarkt zu verringern. In diesem Papier untersuchen wir, inwieweit diese Suchkanäle unterschiedliche Auswirkungen auf den Arbeitsmarkt haben. Anhand einer neuen Datenverknüpfung aus administrativer Daten und Umfragedaten zeigen wir: (i) Niedriglohnfirmen und Niedriglohnbeziehende finden vermehrt über Netzwerke oder die Bundesagentur für Arbeit zueinander, währendessen Hochlohnfirmen und Hochlohnbeziehende häufiger über Stellenanzeigen zusammenkommen. (ii) Dabei nutzen Firmen Stellenanzeigen vor allem bei der Abwerbung und Gewinnung von Hochlohnbeziehenden. Im Vergleich zu anderen Suchkanälen, werden Stellenanzeigen auch vermehrt von Beschäftigten beim Aufstieg auf der Karriereleiter genutzt. Um die Auswirkungen dieser Beobachtungen auf die aggregierte Beschäftigung, die Löhne und die Arbeitsmarktsortierung zu bewerten, schätzen wir strukturell ein Gleichgewichtsmodell, das sich durch Karriereleitern, zweiseitige Heterogenität, mehrere Suchkanäle und endogene Einstellungsintensität auszeichnet. Die Schätzung zeigt, dass Netzwerke der kosteneffizienteste Kanal sind, der es Firmen ermöglicht, schnell einzustellen, aber auch Arbeitskräfte mit geringeren durchschnittlichen Fähigkeiten anzuziehen. Stellenanzeigen sind der kostspieligste Kanal, erleichtern die Einstellung von Arbeitnehmern/-innen mit höheren Fähigkeiten und sind für die Sortierung zwischen Beschäftigten und Firmen am wichtigsten. In kontrafaktischen Berechnungen zeigt sich, dass obwohl die Bundesagentur für Arbeit die geringste Einstellungswahrscheinlichkeit bietet, ihre hypothetische Abschaffung beträchtliche Folgen hätte. Die Gesamtbeschäftigung würde um mindestens 1,4 Prozent sinken und die Lohnungleichheit steigen." (Autorenreferat, IAB-Doku)

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Carrillo-Tudela, Carlos, Hermann Gartner & Leo Kaas (2023): Recruitment Policies, Job-Filling Rates and Matching Efficiency. In: Journal of the European Economic Association, Jg. 21, H. 6, S. 2413-2459., 2023-01-09. DOI:10.1093/jeea/jvad034

Abstract

"Recruitment intensity is important for the matching process in the labor market. Using unique linked survey-administrative data, we investigate the relationships between hiring and recruitment policies at the establishment level. Faster hiring goes along with higher search effort, lower hiring standards and more generous wages. We develop a directed search model that links these patterns to the employment adjustments of heterogenous firms. The model provides a novel structural decomposition of the matching function that we use to evaluate the relative importance of these recruitment policies at the aggregate level. The calibrated model shows that hiring standards play an important role in explaining differences in matching efficiency across labor markets defined as region/skill cross products and for the impact of labor market policy, whereas search effort and wage policies play only a minor role." (Author's abstract, IAB-Doku) ((en))

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Destefanis, Sergio, Matteo Fragetta & Nazzareno Ruggiero (2023): Active and passive labor-market policies: the outlook from the Beveridge curve. In: Applied Economics, Jg. 55, H. 55, S. 6538-6550. DOI:10.1080/00036846.2022.2159010

Abstract

"Following a panel ARDL approach, we appraise the impact of various indicators of active and passive labor-market policies within the framework of the Beveridge curve across fourteen OECD countries from 1985 to 2013, controlling for other factors, both institutional (tax wedge) and structural (technological progress, globalization). We embed the role of these variables within the specification of the Beveridge curve, finding that the generosity of unemployment benefits has a detrimental impact on labor-market matching, with the duration of benefits and the strictness of the rules pertaining to the deployment of benefits taking a key role in driving this result. Among active labor-market policies, employment incentives and especially training have a favourable effect on matching. There is evidence of a virtuous interaction between active and passive policies. A significantly detrimental role emerges for the tax wedge. These results are consistent across various specifications, and structural relationships are stable throughout the 2008–2013 period." (Author's abstract, IAB-Doku) ((en))

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Kiss, Andrea, Robert Garlick, Kate Orkin & Lukas Hensel (2023): Jobseekers’ Beliefs about Comparative Advantage and (Mis)Directed Search. (Upjohn Institute working paper 388), Kalamazoo, Mich., 99 S. DOI:10.17848/wp23-388

Abstract

"Worker sorting into tasks and occupations has long been recognized as an important feature of labor markets. But this sorting may be inefficient if jobseekers have inaccurate beliefs about their skills and therefore apply to jobs that do not match their skills. To test this idea, we measure young South African jobseekers’ communication and numeracy skills and their beliefs about their skill levels. Many jobseekers believe they are better at the skill in which they score lower, relative to other jobseekers. These beliefs predict the skill requirements of jobs where they apply. In two field experiments, giving jobseekers their skill assessment results shifts their beliefs toward their assessment results. It also redirects their search toward jobs that value the skill in which they score relatively higher—using measures from administrative, incentivized task, and survey data—but does not increase total search effort. It also raises earnings and job quality, consistent with inefficient sorting due to limited information." (Author's abstract, IAB-Doku) ((en))

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Lee, Joonbae & Hanna Wang (2023): Ranking and search effort in matching. In: Economic Theory, Jg. 75, H. 1, S. 113-136. DOI:10.1007/s00199-021-01391-4

Abstract

"This paper studies the relationship between search effort and workers’ ranking by employers. In order to do so, we propose a matching model in which employers have common preferences over a continuum of heterogeneous workers who choose a number of applications to send out. We show that in equilibrium, the relationship is hump-shaped for sufficiently high vacancy-to-worker ratios, that is, highly-ranked and lowly-ranked workers send out fewer applications than workers of mid-range rank. This arises due to two opposing forces driving the incentives of applicants. Increasing the number of applications acts as insurance against unemployment, but is less effective when the probability of success for each application is low. This mechanism exacerbates the negative employment outcomes of low-rank workers—hence, in contrast to the market equilibrium, in the social planner’s solution, the number of applications monotonically decrease in rank." (Author's abstract, IAB-Doku) ((en))

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Liontos, George, Konstantinos Mavrigiannakis & Eugenia Vella (2023): The Macroeconomics of Skills Mismatch in the Presence of Emigration. (Working paper series / Athens University of Economics and Business, Department of International and European Economic Studies 2023-14), Athen, 52 S.

Abstract

"Employment in mismatch (low-skill) jobs is a potential factor in the emigration of highly qualified workers. At the same time, high-skilled emigration and emigration of mismatch workers can free up positions for stayers. In bad times, it could also amplify demand losses and the unemployment spell, which in turn affects the mismatch rate. In this paper, we investigate the link between vertical skills mismatch and emigration of both non-mismatch and mismatch workers in a DSGE model. The model features also skill and wealth heterogeneous households, capital-skill complementarity (CSC) and labor frictions. We find that an adverse productivity shock reduces investment and primarily hurts the high-skilled who react by turning to both jobs abroad and mismatch jobs in the domestic labor market. A negative shock to government spending crowds-in investment and primarily hurts the low-skilled who thus turn to jobs abroad. Following the fiscal cut, the high-skilled instead reduce their search for mismatch employment and later they also reduce their search for jobs abroad." (Author's abstract, IAB-Doku) ((en))

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Minni, Virginia (2023): Making the invisible hand visible: Managers and the allocation of workers to jobs. (CEP discussion paper / Centre for Economic Performance 1948), London, 80 S.

Abstract

"Why do managers matter for firm performance? This paper provides evidence of the critical role of managers in matching workers to jobs within the firm using the universe of personnel records from a large multinational firm. The data covers 200,000 white-collar workers and 30,000 managers over 10 years in 100 countries. I identify good managers as the top 30% by their speed of promotion and leverage exogenous variation induced by the rotation of managers across teams. I find that good managers cause workers to reallocate within the firm through lateral and vertical transfers. This leads to large and persistent gains in workers' career progression and productivity. Seven years after the manager transition, workers earn 30% more and perform better on objective performance measures. In terms of aggregate firm productivity, doubling the share of good managers would increase output per worker by 61% at the establishment level. My results imply that the visible hands of managers match workers' specific skills to specialized jobs, leading to an improvement in the productivity of existing workers that outlasts the managers' time at the firm." (Author's abstract, IAB-Doku) ((en))

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Obadić, Alka & Viktor Viljevac (2023): Labour market tightness and matching efficiency in different labour market segments – do differences in education and occupation matter? (EFZG working paper series 2303), Zagreb, 47 S.

Abstract

"This paper analyses the existing educational and occupational structures of several EU member countries and their alignment with the needs of the labour market. Such a situation may indicate a structural mismatch in labour market in which the mismatch between the skills taught in schools and universities and the skills needed in the workplace appears. To evaluate this mismatch, the paper investigates the matching needs of employers and unemployed job seekers by disaggregating the registered employment office data by education and occupation groups in selected EU countries separately. More educated workers, as well as workers in more complex and better-paid occupations, might fare better when it comes to the aggregate labour market trends. For example, economic downturns and increases in unemployment might be felt more heavily by workers with lower education and those who work in professions requiring fewer skills. In this paper, we analyse the data for a selected group of countries (Austria, Croatia, Estonia, Slovenia, and Spain) from 2010 till 2022, using the Beveridge curves and estimate the labour market tightness and matching efficiency for different education and occupation groups. Our results show that differences in education levels and occupation result in relatively small deviations from aggregate trends in the labour market. Aggregate labour market trends therefore strongly impact all groups in the labour market, whether the market is segmented by education levels or by occupation. In other words, both the improvements in the labour market conditions and the worsening of labour market conditions have similar effects across different labour market segments." (Author's abstract, IAB-Doku) ((en))

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Pominova, Mariya & Todd Gabe (2023): Population size and the job matching of college graduates. In: Applied Economics Letters, Jg. 30, H. 20, S. 2994-2997. DOI:10.1080/13504851.2022.2117774

Abstract

"This paper examines the relationship between a region’s population size and the match of college-educated workers to jobs that require a degree. Results show a positive relationship between degree match and county population size in the United States, with a 100,000-person increase in population associated with a 1.3-percentage point increase in the likelihood of a match. The analysis uses a person’s grade point average in college to account for the potential sorting of higher-skilled workers into larger urban areas and the dataset has individuals across a wide range of regions from small rural areas to big cities." (Author's abstract, IAB-Doku) ((en))

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Rehman, Fahad Ur, Tabasam Rashid & Muhammad Tanveer Hussain (2023): Applications of maximum matching by using bipolar fuzzy incidence graphs. In: PLoS ONE, Jg. 18. DOI:10.1371/journal.pone.0285603

Abstract

"The extension of bipolar fuzzy graph is bipolar fuzzy incidence graph (BFIG) which gives the information regarding the effect of vertices on the edges. In this paper, the concept of matching in bipartite BFIG and also for BFIG is introduced. Some results and theorems of fuzzy graphs are also extended in BFIGs. The number of operations in BFIGs such as augmenting paths, matching principal numbers, relation between these principal numbers and maximum matching principal numbers are being investigated which are helpful in the selection of maximum most allied applicants for the job and also to get the maximum outcome with minimum loss (due to any controversial issues among the employees of a company). Some characteristics of maximum matching principal numbers in BFIG are explained which are helpful for solving the vertex and incidence pair fuzzy maximization problems. Lastly, obtained maximum matching principal numbers by using the matching concept to prove its applicability and effectiveness for the applications in bipartite BFIG and also for the BFIG." (Author's abstract, IAB-Doku) ((en))

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Ryan, Rich (2023): Responses of unemployment to productivity changes for a general matching technology. In: Economics Bulletin, Jg. 43, H. 4, S. 1749-1758.

Abstract

"Workers separate from jobs, search for jobs, accept jobs, and fund consumption with their wages. Firms recruit workers to fill vacancies. Search frictions prevent firms from instantly hiring available workers. Unemployment persists. These features are described by the Diamond--Mortensen--Pissarides modeling framework. In this class of models, how unemployment responds to productivity changes depends on resources that can be allocated to job creation. Yet, this characterization has been made when matching is parameterized by a Cobb--Douglas technology. For a canonical DMP model, I (1) demonstrate that a unique steady-state equilibrium will exist as long as the initial vacancy yields a positive surplus; (2) characterize responses of unemployment to productivity changes for a general matching technology; and (3) show how a matching technology that is not Cobb--Douglas implies unemployment responds more to productivity changes, which is independent of resources available for job creation, a feature that will be of interest to business-cycle researchers." (Author's abstract, IAB-Doku) ((en))

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Weißmann, Markus & Tobias Roth (2023): Pre-existing company contacts and premature termination of apprenticeship training in Germany. In: Research in Social Stratification and Mobility, Jg. 87. DOI:10.1016/j.rssm.2023.100839

Abstract

"Using longitudinal data from Starting Cohort 4 of the German National Educational Panel Study (NEPS), we examined whether pre-existing strong ties and weak ties in the training company are associated with the risk of premature termination of apprenticeship training in Germany. This is highly relevant for the literature on social capital in the labor market since so far little is known about the role of social contacts for the turnover propensity of labor market entrants. By examining a potentially important factor for a successful labor market integration, our research also adds to both the school-to-work and the social stratification literature. Our empirical results are only partly consistent with our theoretically derived expectations. While contrary to our expectations, we found no association between strong ties and termination probability, weak ties were, as expected, associated with a lower probability of premature training termination among those apprentices who were trained in their desired occupation. Our main results, combined with several robustness checks, let us assume that this is due to better matched training situations." (Author's abstract, IAB-Doku, © 2024 Elsevier) ((en))

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Card, David (2022): Who Set Your Wage? In: The American economic review, Jg. 112, H. 4, S. 1075-1090. DOI:10.1257/aer.112.4.1075

Abstract

"I discuss the recent literature that has led to new interest in the idea of monopsonistic wage setting. Building on advances in search theory and in models of differentiated products, researchers have used a number of different strategies to identify the elasticity of firm-specific labor supply. A growing consensus is that firms have some wage-setting power, though many questions remain about the sources of that power." (Author's abstract, IAB-Doku) ((en))

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Coraggio, Luca, Marco Pagano, Annalisa Scognamiglio & Joacim Tåg (2022): JAQ of All Trades: Job Mismatch, Firm Productivity and Managerial Quality. (IFN working paper / Research Institute of Industrial Economic 1427), Stockholm, 37 S.

Abstract

"Does the matching between workers and jobs help explain productivity differentials across firms? To address this question we develop a job-worker allocation quality measure (JAQ) by combining employer-employee administrative data with machine learning techniques. The proposed measure is positively and significantly associated with labor earnings over workers' careers. At firm level, it features a robust positive correlation with firm productivity, and with managerial turnover leading to an improvement in the quality and experience of management. JAQ can be constructed for any employer-employee data including workers' occupations, and used to explore the effect of corporate restructuring on workers' allocation and careers." (Author's abstract, IAB-Doku) ((en))

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Dellkamm, Rabea, Kathrin Möckel, Holger Schäfer & Oliver Stettes (2022): Wie gut passen Bewerber und Stellen zusammen? Eine Analyse der Qualität neu zustande gekommener Arbeitsverhältnisse (Matches) in ausgewählten Arbeitssegmenten. (IW-Report / Institut der Deutschen Wirtschaft Köln 2022,47), Köln, 24 S.

Abstract

"Die empirische Arbeitsmarktforschung ist derzeit nur eingeschränkt in der Lage, die Qualität der Ausgleichprozesse am Arbeitsmarkt anhand der Merkmale der neu zustande gekommenen Beschäftigungsverhältnisse zu beschreiben. Die Analyse von Stellenanzeigen kann zwar detaillierte Einblicke über konkrete Stellenanforderungen geben, ob diese aber auch von den späteren Stelleninhabern erfüllt werden, bleibt bei einer derartigen Analyse ungeklärt. Auswertungen der IAB-Stellenerhebung stehen unter dem Vorbehalt, dass sie nur die letzte neu besetzte Vakanz in den Blick nehmen können. Die vorliegende Studie auf Basis eines speziell für diese Zwecke bereitgestellten Datensatzes durch den Personaldienstleister Hays, der detaillierte Informationen sowohl über Stellenanforderungen als auch die Kompetenzprofile der Beschäftigten in neu zustande gekommenen Arbeitsverhältnissen enthält, zeigt die Potenziale von Analysen auf, die die Qualität einer großen Anzahl von Matching-Prozessen beschreiben wollen." (Autorenreferat, IAB-Doku)

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Fernandez, Marcelo Ariel, Kirill Rudov & Leeat Yariv (2022): Centralized Matching with Incomplete Information. In: The American economic review. Insights, Jg. 4, H. 1, S. 18-33. DOI:10.1257/aeri.20210123

Abstract

"We study the impacts of incomplete information on centralized one-to-one matching markets. We focus on the commonly used Deferred Acceptance mechanism (Gale and Shapley 1962). We show that many complete-information results are fragile to a small infusion of uncertainty about others’ preferences." (Author's abstract, IAB-Doku)((en))

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Jain, Ritesh & Srinivasan Murali (2022): Labour search with endogenous outside option. In: Economics Bulletin, Jg. 42, H. 2, S. 1092-1102.

Abstract

"We incorporate the extended version of Nash bargaining proposed by Vartiainen (2007) in a standard labour search and matching model to endogenously determine the outside option of workers along with their wages. We find that the optimal outside option of a worker under this framework is zero and this equilibrium maximizes social welfare when the economy is constrained efficient." (Author's abstract, IAB-Doku) ((en))

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Kohlbrecher, Britta & Christian Merkl (2022): Business cycle asymmetries and the labor market. In: Journal of macroeconomics, Jg. 73. DOI:10.1016/j.jmacro.2022.103458

Abstract

"This paper shows that a search and matching model with idiosyncratic training cost shocks can explain the asymmetric movement of the job-finding rate over the business cycle and the decline of matching efficiency in recessions. Large negative aggregate shocks move the hiring cutoff into a part of the training cost distribution with higher density. The position of the hiring cutoff in the distribution is disciplined by the empirical elasticity of the job-finding rate with respect to market tightness. Our model explains a large fraction of the matching efficiency decline during the Great Recession and generates state-dependent effects of policy interventions." (Author's abstract, IAB-Doku, © 2022 Elsevier) ((en))

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Leknes, Stefan, Jørn Rattsø & Hildegunn E. Stokke (2022): Assortative labor matching, city size, and the education level of workers. In: Regional Science and Urban Economics, Jg. 96. DOI:10.1016/j.regsciurbeco.2022.103806

Abstract

"We investigate the heterogeneity of assortative labor matching with respect to geography, skills, and tasks. Our contribution is to separate plant quality by education level and occupation tasks using the AKM-model. We introduce a geology-related instrument to analyze the city effect and address limited mobility bias. Using rich administrative worker-plant dataset for Norway, we show that matching of the college educated have a strong city effect. The IV estimates indicate that a doubling of city size increases the correlation between worker and plant quality by 9 percentage points. A wage decomposition shows that matching accounts for 22% of the urban wage premium adjusted for sorting. In terms of occupations, better matching in cities is observed only for non-routine abstract tasks." (Author's abstract, IAB-Doku, © 2022 Elsevier) ((en))

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Lochner, Benjamin & Christian Merkl (2022): Gender-Specific Application Behavior, Matching, and the Residual Gender Earnings Gap. (LASER discussion papers 139), Erlangen, 55 S.

Abstract

"In diesem Papier untersuchen wir das geschlechterspezifische Bewerbungs- und Einstellungsverhalten sowie deren Implikationen für die Lohnlücke. Um die zugrundeliegenden Mechanismen besser zu verstehen, leiten wir aus einem zweistufigen Matching-Modell Implikationen her, die wir auf Basis der IAB-Stellenerhebung überprüfen. Es zeigt sich, dass die Muster in den Daten konsistent mit der Theorie von linearen und nichtlinearen Produktionsfunktionen sind. Wir dokumentieren, dass sich Frauen seltener bei Hochlohn- als bei Niedriglohnfirmen bewerben. Dahingegen finden wir keinen statistisch signifikanten Unterschied in der Einstellungswahrscheinlichkeit zwischen Männern und Frauen, wenn sie sich bei Hochlohnfirmen bewerben. Diese Muster sprechen gegen die Diskriminierungshypothese aus dem theoretischen Modell, lassen sich aber dadurch erklären, dass Jobs bei Hochlohnfirmen höhere arbeitgeberseitige Flexibilitätsanforderungen haben. Wir zeigen, dass der Anteil der männlichen Bewerber in verschiedenen, beobachtbaren Flexibilitätsanforderungen ansteigt. Wenn wir den Anteil der männlichen Bewerber in Mincer-Lohnregressionen als zusätzliche erklärende Variable für Flexibilitätsanforderungen aufnehmen, sinkt der Geschlechterunterschied im Einstellungslohn zwischen Männern und Frauen um etwa 50-60 Prozent. Frauen, die in Jobs eingestellt werden, bei denen sich viele Männer bewerben, verdienen signifikant mehr als Frauen, die in vergleichbaren Jobs eingestellt werden, bei denen sich ausschließlich Frauen bewerben. Wenn Frauen mit Kindern Jobs mit hohen Flexibilitätsanforderungen annehmen, müssen sie dahingegen große Lohneinbußen im Vergleich zu Männern hinnehmen." (Autorenreferat, IAB-Doku)

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Summerfield, Fraser (2022): Economic conditions, task shares, and overqualification. In: Oxford economic papers, Jg. 74, H. 1, S. 40-61. DOI:10.1093/oep/gpab002

Abstract

"This article demonstrates that economic conditions affect job match quality by influencing the task shares of available jobs. Cognitive (reasoning/communication) and physical (sensory/coordination) task shares and education-based overqualification measures are generated from Canada’s Labour Force Survey, the Career Handbook, and the Occupational Information Network database. In unfavourable labour markets, cognitive task intensity decreases and physical task intensity rises. The task content of newly formed jobs is then shown to be an important empirical determinant of overqualification. A calibrated search model that accounts for these findings quantifies the costs of increased overqualification. Each percentage point increase in unemployment raises overqualification by 5.8 percentage points, partly due to changes in task shares. Economic output subsequently decreases by about 0.6%." (Author's abstract, IAB-Doku) ((en))

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Bernstein, Joshua, Alexander W. Richter & Nathaniel Throckmorton (2021): Nonlinear Search and Matching Explained. (Working paper / Federal Reserve Bank of Dallas, Research Department 2106), Dallas, TX, 28 S. DOI:10.24149/wp2106

Abstract

"Competing explanations for the sources of nonlinearity in search and matching models indicate that they are not fully understood. This paper derives an analytical solution to a textbook model that highlights the mechanisms that generate nonlinearity and quantifies their contributions. Procyclical variation in the matching elasticity creates nonlinearity in the job finding rate, which interacts with the law of motion for unemployment. These results show the matching function choice is not innocuous. Quantitatively, the Den Haan et al. (2000) matching function more than doubles the skewness of unemployment and welfare cost of business cycles, compared to the Cobb-Douglas specification." (Author's abstract, IAB-Doku) ((en))

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Brun-Schammé, Amandine & Martin Rey (2021): A new approach to skills mismatch. (OECD productivity working papers 24), Paris, 28 S. DOI:10.1787/e9563c2a-en

Abstract

"Skills mismatch - the sub-optimal use of an individual's skills in their occupation - can be a source of dissatisfaction for workers and a brake for productivity growth. In our view, a difference in the level of skills within an occupation is not sufficient to infer that a skills mismatch exists. Since skills-mismatch is the result of a disparity between the supply and demand of labour, the quantifying of skills-mismatch must therefore be based on the mechanisms involved in this disparity. We propose to include in our measurement the level of education and field of study, which are key markers of an individual's skill level in the labour market. This makes it possible to identify, among individuals whose skill level differs from others within an occupation, those whose training profile can (or cannot) explain this situation. Through using the OECD PIAAC 2012 survey, this paper first identifies with data for France, individuals who present an apparent skills mismatch according to the framework proposed. Following an international comparison of “apparent skills mismatch rates”, we conclude this study by observing how the different groups identified differ in terms of how they perceive their employment situation as well as their individual characteristics." (Author's abstract, IAB-Doku) ((en))

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Gebauer, Markus (2021): Complementary jobs and optimal matching. In: Labour, Jg. 35, H. 3, S. 291-310. DOI:10.1111/labr.12204

Abstract

"This paper introduces strong complementarities in labour into an otherwise classical Diamond–Mortensen–Pissarides search model. Specifically, two workers are required to perform a task. The assumption of Nash bargaining is maintained to represent the Hosios condition transparently. We show that this setup leads to additional externalities that require more than a Hosios-style condition to be met. The surplus must be shared between the workers so that the employer internalizes additional externalities. This makes implementing efficiency even more challenging." (Author's abstract, IAB-Doku, Published by arrangement with John Wiley & Sons) ((en))

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Gürtzgen, Nicole, Benjamin Lochner, Laura Pohlan & Gerard J. van den Berg (2021): Does Online Search Improve the Match Quality of New Hires? In: Labour Economics, Jg. 70, S. 101981., 2021-03-16. DOI:10.1016/j.labeco.2021.101981

Abstract

"Die Studie untersucht den Effekt der Expansion des Breitbandinternets auf die Matchqualität neu eingestellter Personen. Hierzu werden Daten zur regionalen Internetverfügbarkeit mit administrativen Individualdaten und Vakanzdaten für den deutschen Arbeitsmarkt kombiniert. Die Ergebnisse zeigen, dass eine Ausweitung der Breitbandinternet-Verfügbarkeit keinen größeren Einfluss auf die Stabilität und Entlohnung neu begonnener Beschäftigungsverhältnisse hat. Diese Resultate werden auf Basis von Analysen mit Vakanzdaten bestätigt. Diese Daten erlauben einen expliziten Vergleich der Matchqualität von Personen, die online rekrutiert wurden, mit der Matchqualität von Personen, die über andere Rekrutierungskanäle eingestellt wurden. Weiterhin zeigen die Ergebnisse, dass Online-Rekrutierung nicht nur die Anzahl der Bewerbungen und den Anteil ungeeigneter Bewerbungen erhöht, sondern ebenfalls zu einer höheren Anzahl von Vakanzen führt." (Autorenreferat, IAB-Doku)

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Korenok, Oleg & David Munro (2021): Wage bargaining in a matching market: Experimental evidence. In: Labour Economics, Jg. 73. DOI:10.1016/j.labeco.2021.102078

Abstract

"Wage negotiation plays a central role in the dynamics of search and matching models. We explore the theoretical wage predictions of the canonical search and matching model of Diamond (1982) in laboratory bargaining experiments. Overall, wages in the experiment are less responsive to changes in the market conditions than theory predicts. Wages respond to changes in unemployment insurance in the correct direction, yet the size of the response is about half of what theory predicts. On the other hand, contrary to theory, wages are unresponsive to changes in the level of unemployment. We also find that wages of new matches are more sensitive than wages of on-going matches, and that the duration of unemployment influences wages in certain settings." (Author's abstract, IAB-Doku, © 2022 Elsevier) ((en))

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Kuhn, Moritz, Iourii Manovskii & Xincheng Qiu (2021): The Geography of Job Creation and Job Destruction. (ECONtribute discussion paper 122), Köln ; Bonn, 45, A-20 S.

Abstract

"Spatial differences in labor market performance are large and highly persistent. Using data from the United States, Germany, and the United Kingdom, we document striking similarities in spatial differences in unemployment, vacancies, job finding, and job filling within each country. This robust set of facts guides and disciplines the development of a theory of local labor market performance. We find that a spatial version of a Diamond-Mortensen-Pissarides model with endogenous separations and on-the-job search quantitatively accounts for all the documented empirical regularities. The model also quantitatively rationalizes why differences in job-separation rates have primary importance in inducing differences in unemployment across space while changes in the job-finding rate are the main driver in unemployment fluctuations over the business cycle." (Author's abstract, IAB-Doku) ((en))

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Åslund, Olof, Cristina Bratu, Stefano Lombardi & Anna Thoresson (2021): Firm productivity and immigrant-native earnings disparity. (CReAM discussion paper 2021,37), London, 35 S.

Abstract

"We study the role of firm productivity in explaining earnings disparities between immigrants and natives using population-wide matched employer-employee data from Sweden. We find substantial earnings returns to working in firms with higher persistent productivity, with greater gains for immigrants from non-Western countries. Moreover, the pass-through of within-firm productivity variation to earnings is stronger for immigrants in low-productive, immigrant-dense firms. But immigrant workers are underrepresented in high-productive firms and less likely to move up the productivity distribution. Thus, sorting into less productive firms decreases earnings in poor-performing immigrant groups that would gain the most from working in high-productive firms" (Author's abstract, IAB-Doku) ((en))

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Bhuller, Manudeep, Andreas R. Kostøl & Trond C. Vigtel (2020): How broadband internet affects labor market matching. (IZA discussion paper 12895), Bonn, 63 S.

Abstract

"How the internet affects job matching is not well understood due to a lack of data on job vacancies and quasi-experimental variation in internet use. This paper helps fill this gap using plausibly exogenous roll-out of broadband infrastructure in Norway, and comprehensive data on recruiters, vacancies and job seekers. We document that broadband expansions increased online vacancy-postings and lowered the average duration of a vacancy and the share of establishments with unfilled vacancies. These changes led to higher job-finding rates and starting wages and more stable employment relationships after an unemployment-spell. Consequently, our calculations suggest that the steady-state unemployment rate fell by as much as one-fifth." (Author's abstract, IAB-Doku) ((en))

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Carbonnier, Clément (2020): Complementarity Between Low- and High-Skilled Workers and the Employment Impact of Tax versus Human Capital Policies. In: Annals of economics and statistics H. 138, S. 49-76. DOI:10.15609/annaeconstat2009.138.0049

Abstract

"The present paper analyses theoretically the impact of substitutability and complementarity between labor market segments on the efficiency of policies tackling low-skilled unemployment. Based on a search and matching model with multiple segments interacting through the production function, it is shown that the efficiency of cost policies - decreasing payroll taxes on low-skill segments - increases with the segments' substitutability. Reducing the relative cost of low-skill labor - through tax wedge decrease - induces labor demand increase if low-skill labour is substitute to other production factors. The efficiency of productivity policies - upgrading workers from lower to higher-skill segments - increases with their complementarity. Enhancing human capital allows increasing production - constrained by the scarcity of high-skill labor - hence increases low-skill labor demand if factors are complements. Consequently, variations of the efficiency of both policies may derive from the technological change, modifying the complementarity between segments." (Author's abstract, IAB-Doku) ((en))

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Carrillo-Tudela, Carlos, Hermann Gartner & Leo Kaas (2020): Recruitment Policies, Job-Filling Rates and Matching Efficiency. (IAB-Discussion Paper 15/2020), Nürnberg, 51 S.

Abstract

"Für das Matching am Arbeitsmarkt spielt das Rekrutierungsverhalten der Betriebe eine zentrale Rolle. Um zu untersuchen, wie das Rekrutierungsverhalten mit der Zahl der Einstellungen zusammenhängt, verknüpfen wir die IAB-Stellenerhebung mit administrativen Daten. Es zeigt sich: Mehr Einstellungen sind mit mehr Suchaufwand verbunden, mit großzügigeren Löhnen und mit geringeren Anforderungen an die Arbeitsuchenden. Um zu analysieren, welcher Mechanismus diesem Muster zugrunde liegt, entwickeln wir ein Modell mit zielgerichteter Suche. Betriebe können dabei bei Produktivitätsschocks ihr Rekrutierungsverhalten über mehrere Stellschrauben anpassen. Im kalibrierten Modell erweist sich das Anforderungsnieveau als wichtigste Stellschraube für die Auswirkung auf die Matching-Effizienz und für die Wirksamkeit von Arbeitsmarktpolitik. Suchaufwand und die Lohnpolitik spielen demgegenüber eine kleinere Rolle." (Autorenreferat, IAB-Doku)

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Cubas, German & Pedro Silos (2020): Social Insurance And Occupational Mobility. In: International Economic Review, Jg. 61, H. 1, S. 219-240. DOI:10.1111/iere.12422

Abstract

"This article studies how insurance from progressive taxation improves the matching of workers to occupations. We propose an equilibrium dynamic assignment model to illustrate how social insurance encourages mobility. Workers experiment to find their best occupational fit in a process filled with uncertainty. Risk aversion and limited earnings insurance induce workers to remain in unfitting occupations. We estimate the model using microdata from the United States and Germany. Higher earnings uncertainty explains the U.S. higher mobility rate. When workers in the United States enjoy Germany's higher progressivity, mobility rises. Output and welfare gains are large." (Author's abstract, IAB-Doku, Published by arrangement with John Wiley & Sons) ((en))

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Leckcivilize, Attakrit & Alexander Straub (2020): Your wingman could help you land a job: How beauty composition of applicants affects the call-back probability. In: Labour Economics, Jg. 65. DOI:10.1016/j.labeco.2020.101857

Abstract

"This paper analyses how both own appearance and the beauty composition of other candidates influence the chances of being selected for a job interview. Based on our lab experiment with randomised CVs, we confirm the role of appearance on job recruitment. Importantly, we show that appearance of other applicants with the same gender has significant incremental effects on top of the existing beauty premium. This “wingman effect” is more pronounced in high skilled occupations and mainly among male recruiters. We provide evidence that the “wingman effect” is not driven by system one decision making and predominantly affects choices at the margin." (Author's abstract, IAB-Doku, © 2020 Elsevier) ((en))

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Martin, Christopher & Bingsong Wang (2020): Search, shirking and labor market volatility. In: Journal of macroeconomics, Jg. 66. DOI:10.1016/j.jmacro.2020.103243

Abstract

"This paper proposes a modified version of the standard search and matching model of the labor market that includes a shirking mechanism. We show that our model delivers a close match to the simulated volatilities, correlations and autocorrelations of unemployment, vacancies, labor market tightness and the job finding rate with values observed in US data. In doing so, it outperforms prominent alternative models. Our model also has novel policy implications for the impact of income taxes, subsidies on hiring and employment taxes on unemployment and its volatility." (Author's abstract, IAB-Doku, © 2020 Elsevier) ((en))

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Masui, Makoto (2020): Efficiency in a search and matching model with endogenous labor participation and different skill groups. In: Economics Bulletin, Jg. 40, H. 4, S. 2648-2653.

Abstract

"This study addresses endogenous labor force participation based on a search and matching model with workers' productivity dispersion within different skill groups. I show that equilibrium vacancy creation can be both excessive and insufficient from the viewpoint of economic efficiency, depending on the relative share of workers in a high-skill group." (Author's abstract, IAB-Doku) ((en))

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Piopiunik, Marc, Guido Schwerdt, Lisa Simon & Ludger Wößmann (2020): Skills, signals, and employability: An experimental investigation. In: European Economic Review, Jg. 123. DOI:10.1016/j.euroecorev.2020.103374

Abstract

"Because most skills of labor-market entrants are not directly observed by employers, individuals acquire skill signals. To study which signals are valued by employers, we randomize several skill signals on resumes of fictitious applicants among which we ask a large representative sample of German human-resource managers to choose. We find that signals in both studied domains – cognitive and social skills – have significant effects on being invited for a job interview. Consistent with their relevance, expectedness, and credibility, different signals are effective for apprenticeship applicants and college graduates. While GPAs and social skills are significant for both genders, females are particularly rewarded for IT and language skills. Older HR managers value school grades less and other signals more. HR managers in larger firms value college grades more." (Author's abstract, IAB-Doku, © 2020 Elsevier) ((en))

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Banfi, Stefano & Benjamin Villena-Roldan (2019): Do high-wage jobs attract more applicants? Directed search evidence from the online labor market. In: Journal of labor economics, Jg. 37, H. 3, S. 715-746. DOI:10.1086/702627

Abstract

"Labor markets become more efficient in theory if job seekers direct their search. Using online job board data, we show that high-wage ads attract more applicants as in directed search models. Due to distinctive data features, we also estimate significant but milder directed search for hidden (or implicit) wages, suggesting that ad texts and requirements tacitly convey wage information. Since explicit-wage ads often target unskilled workers, other estimates in the literature ignoring hidden-wage ads may suffer from selection bias. Moreover, job ad requirements are aligned with their applicants' traits, as predicted in directed search models with heterogeneity." (Author's abstract, IAB-Doku) ((en))

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Capuano, Carlo & Iacopo Grassi (2019): Upward-sloping labor supply, firing costs and collusion. In: Economics Bulletin, Jg. 39, H. 1, S. 502-512.

Abstract

"We analyze the sustainability of collusion in a supergames framework wherein the only input is a highly qualified type of labor, with its supply being upward-sloping and the wage being sensitive to the industry input demand. Hence, when seeking to expand production, firms have to attract additional employees by offering them higher wages. We compare equilibria and social welfare in both quantity and price competitions, as well as by considering non-negligible firing costs. We prove that: the sensitivity of wages to the industry demand for labor facilitates collusion in price competition (in quantity competition, the reverse is true); in both price and quantity competitions, collusion should be welfare-enhancing when the sensitivity of wage is high enough. Moreover, the introduction of firing costs, decreasing the incentive to cut the production after a temporary rise, reduces the deviation profits making collusion easier to sustain. Our results can be extended to any context where input prices are endogenous." (Author's abstract, IAB-Doku) ((en))

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Fu, Jingcheng, Martin Sefton & Richard Upward (2019): Social comparisons in job search. In: Journal of Economic Behavior & Organization, Jg. 168, S. 338-361. DOI:10.1016/j.jebo.2019.10.013

Abstract

Using a laboratory experiment we examine how social comparisons affect behavior in a sequential search task. In a control treatment subjects search in isolation, while in two other treatments subjects get feedback on the search decisions and outcomes of a partner subject. The average level and rate of decline of reservation wages are similar across treatments. Nevertheless, subjects who are able to make social comparisons search differently from those who search in isolation. Within a search task we observe a reference wage effect: when a partner exits, the subject chooses a new reservation wage which is increasing in partner income. We also observe a social comparison effect between search tasks: subjects whose partners in a previous task searched for longer choose a higher reservation wage in the next task. Our findings imply that the provision of social information can change job-seekers search behavior. (Author's Abstract, IAB-Doku)

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Gartner, Hermann, Thomas Rothe & Enzo Weber (2019): The Quality-Weighted Matching Function: Did the German Labour Market Reforms Trade off Efficiency against Job Quality? (IAB-Discussion Paper 24/2019), Nürnberg, 14 S.

Abstract

"Wir analysieren den Zielkonflikt zwischen Umfang und Qualität der Beschäftigung, indem wir eine erweiterte Matching-Funktion schätzen, worin die Zahl der neue Beschäftigungsverhältnisse (Matches) mit deren Qualität gewichtet wird. Diesen Ansatz verwenden wir, um die Auswirkungen der Hartz-Reformen der Jahre 2003 bis 2005 auf den Arbeitsmarkt zu bewerten. In der Tat bestätigt sich, dass ein Teil der zusätzlichen Beschäftigungsverhältnisse durch schlechtere Qualität erkauft war. Auch bei konstanter Qualität der neuen Matches wäre aber gut die Hälfte des positiven Effektes auf die Matchingeffizienz infolge der Hartz-Reformen verblieben." (Autorenreferat, IAB-Doku)

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Gradstein, Mark (2019): Misallocation of talent and human capital. Political economy analysis. In: European Economic Review, Jg. 118, H. September, S. 148-157. DOI:10.1016/j.euroecorev.2019.05.010

Abstract

"Mismatches in the labor market, specifically because of underrepresentation of various population groups, carry significant economic cost. In this paper we argue, using a simple analytical model that an additional cost component is related to the effect of such underrepresentation on incentives to invest in human capital, which results in a mutual feedback relationship between the labor market and the skill acquisition market and may lead to economy's divergence. Further, it is shown that an initially advantaged group may have an incentive to minimize the bias against the disadvantaged group, and that political enfranchisement is the means to achieve a commitment to such a policy." (Author's abstract, © 2019 Elsevier) ((en))

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Haeringer, Guillaume & Vincent Iehlé (2019): Two-sided matching with (almost) one-sided preferences. In: American Economic Journal. Microeconomics, Jg. 11, H. 3, S. 155-190. DOI:10.1257/mic.20170115

Abstract

"In a two-sided matching context we show how we can predict stable matchings by considering only one side's preferences and the mutually acceptable pairs of agents. Our methodology consists of identifying impossible matches, i.e., pairs of agents that can never be matched together in a stable matching of any problem consistent with the partial data. We analyze data from the French academic job market for mathematicians and show that the match of about 45 percent of positions (and about 60 percent of candidates) does not depend on the preferences of the hired candidates, unobserved and submitted at the final stage of the market." (Author's abstract, IAB-Doku) ((en))

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Somers, Melline A., Sofie J. Cabus, Wim Groot & Henriëtte Maassen van den Brink (2019): Horizontal mismatch between employment and field of education. Evidence from a systematic literature review. In: Journal of Economic Surveys, Jg. 33, H. 2, S. 597-603. DOI:10.1111/joes.12271

Abstract

"This paper provides a systematic review of the growing literature on the poor match between employees' field degree and the job requirements, also referred to as horizontal mismatch. We identify the different definitions used in the literature and find that each measure of horizontal mismatch yields substantially different incidence rates. We discuss the validity of the different measures and conclude that a more uniform definition of horizontal mismatch is needed. The likelihood of horizontal mismatch is among other things determined by the extent to which employees possess general skills as opposed to occupation-specific skills, and, it appears to be more frequently present among older workers. Compared to well-matched employees, horizontally mismatched workers generally incur a wage penalty, are less satisfied with their jobs, and are more likely to regret their study programme. The ensuing findings offer guidance to prevent horizontal mismatch as well as a roadmap for future research." (Author's abstract, Published by arrangement with John Wiley & Sons) ((en))

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Weingärtner, Simon (2019): Soziologische Arbeitsmarkttheorien. Ein Überblick. (Wirtschaft und Gesellschaft), Wiesbaden: Springer VS, 246 S. DOI:10.1007/978-3-658-23743-1

Abstract

"Die Arbeit stellt die erste Einführung und Übersicht zu soziologischen Arbeitsmarkttheorien im deutschsprachigen Raum vor und versucht einen Brückenschlag zwischen Wirtschafts- und Arbeitsmarktsoziologie. Anhand eines mehrdimensionalen Systematisierungskonzeptes werden arbeitsmarkttheoretische Erklärungsansätze aus verschiedenen sozialtheoretischen Forschungsrichtungen vorgestellt und anhand ihrer zentralen Aussagen und empirischen Schlussfolgerungen miteinander verglichen." (Verlagsangaben, © Springer)

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de Larquier, Guillemette & Géraldine Rieucau (2019): Valuation and matching: A conventionalist explanation of labor markets by firms' recruitment channels. In: Historical social research, Jg. 44, H. 1, S. 52-72. DOI:10.12759/hsr.44.2019.1.52-72

Abstract

"In line with the conventionalist works on recruitment and intermediation in the labor market, this article argues that, in order to shape uncertainty about the quality of matching, recruitment channels used by firms rely on 'investments in forms.' The first investment corresponds to the definition of the boundaries of the labor market (i.e., the outline of the labor supply from the firm's point of view); the second one corresponds to the format of information (i.e., the 'standard' or 'personalized' language used by channels to convey information). The firm's resort to a given channel is explained by its internal organization and its valuation of what is a good applicant (depending on its 'labor quality convention'). By crossing-over the two types of investment in forms, we distinguish four matching dynamics. Each type of dynamics is illustrated by examples coming from a qualitative survey of recruitment practices in four French service oriented sectors." (Author's abstract, © GESIS) ((en))

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Adugna Chala, Sisay, Fazel Ansari, Madjid Fathi & Kea Tijdens (2018): Semantic matching of job seeker to vacancy. A bidirectional approach. In: International journal of manpower, Jg. 38, H. 8, S. 1047-1063. DOI:10.1108/IJM-10-2018-0331

Abstract

"The purpose of this paper is to propose a framework of an automatic bidirectional matching system that measures the degree of semantic similarity of job-seeker qualifications and skills, against the vacancy provided by employers or job-agents." (Author's abstract, © Emerald Group) ((en))

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Boitier, Vincent & Antoine Lepetit (2018): Reduced form wage equations in the credible bargaining model. In: Labour economics, Jg. 50, H. March, S. 92-96. DOI:10.1016/j.labeco.2016.04.003

Abstract

"We derive an explicit solution for the wage from an alternating-offer wage bargaining game à la Hall and Milgrom (2008) under a plausible parameter restriction. This solution is simple, micro-founded and permits a transparent analysis of the driving forces of wages. When it is used in a stationary steady-state search and matching model, the value of all endogenous variables can be expressed as a function of the parameters of the model and the exogenous variables. In a dynamic setup, the solution is much simpler to implement than the one found in the original paper of Hall and Milgrom (2008)." (Author's abstract, © 2016 Elsevier) ((en))

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Bova, Elva, João Tovar Jalles & Christina Kolerus (2018): Shifting the Beveridge curve. What affects labor market matching? In: International Labour Review, Jg. 157, H. 2, S. 267-306. DOI:10.1111/ilr.12046

Abstract

"This paper explores conditions and policies that could affect the matching between labor demand and supply. We identify shifts in the Beveridge curves for 12 OECD countries between 2000Q1 and 2013Q4 using three complementary methodologies and analyze the short-run determinants of these shifts by means of limited-dependent variable models. We find that labor force growth as well as employment protection legislation reduce the likelihood of an outward shift in the Beveridge curve,. Our findings also show that the matching process is more difficult the higher the share of employees with intermediate levels of education in the labor force and when long-term unemployment is more pronounced. Policies which could facilitate labor market matching include active labor market policies, such as incentives for start-up and job sharing programs. Passive labor market policies, such as unemployment benefits, as well as labor taxation render matching significantly more difficult." (Author's abstract, Published by arrangement with John Wiley & Sons) ((en))

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Carlsson, Mikael & Andreas Westermark (2018): Endogenous separations, wage rigidities and unemployment volatility. (Working papers / Institute for Evaluation of Labour Market and Education Policy 2018,05), Uppsala, 33 S.

Abstract

"We show that in microdata, as well as in a search and matching model with flexible wages for new hires, wage rigidities of incumbent workers have substantial effects on separations and unemployment volatility. Allowing for an empirically relevant degree of wage rigidities for incumbent workers drives unemployment volatility, as well as the volatility of vacancies and tightness to that in the data. Thus, the degree of wage rigidity for newly hired workers is not a sufficient statistic for determining the effect of wage rigidities on macroeconomic outcomes. This finding affects the interpretation of a large empirical literature on wage rigidities." (Author's abstract, IAB-Doku) ((en))

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Cunyat, Antoni (2018): Crowding-out effect and sorting in competitive labour markets with motivated workers. In: Applied Economics Letters, Jg. 26, H. 4, S. 326-330. DOI:10.1080/13504851.2018.1468550

Abstract

"This article makes a contribution to the economics literature by inducing proper self-selection into contracts based on workers' motivation. The novelty of our results is that it points out the alternative potential role of the crowding-out effect to separate workers based on their motivation." (Author's abstract, IAB-Doku) ((en))

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Damelang, Andreas, Michael Stops & Martin Abraham (2018): Occupations as labour market institutions. Occupational regulation and its effects on job matching and occupational closure. In: Soziale Welt, Jg. 69, H. 4, S. 406-426., 2018-11-02. DOI:10.5771/0038-6073-2018-4-406

Abstract

"Wir definieren Berufe als Institutionen, die das Bildungssystem mit dem Arbeitsmarkt koppeln und argumentieren, dass Berufe idealtypische Anforderungsprofile von Stellenangeboten darstellen. Auf dieser theoretischen Grundlage erarbeiten wir unterschiedliche Mechanismen, wie berufliche Institutionen und deren Regulierung berufliche Qualifikationen definieren und den Zugang zu Berufen und gleichzeitig Mobilität zwischen Berufen strukturieren. Das Ausmaß der beruflichen Regulierung variiert erheblich zwischen den Berufen. Darauf aufbauend analysieren wir die Auswirkungen der beruflichen Regulierung. Wir zeigen, dass die Regulierung zweiteilige Effekte hat. Erstens erhöht die berufliche Regulierung den Informationsstand sowohl für Arbeitgeber als auch für Arbeitssuchende und verringert somit die Unsicherheit im Matching-Prozess. Zweitens produziert berufliche Regulierung 'closed shops', indem der Zugang zu Berufen eingeschränkt wird. Studien, die sowohl die positiven als auch die negativen Auswirkungen beruflicher Regulierungen berücksichtigen, sind bisher selten. Wir schließen diese Lücke, indem wir zwei zentrale Arbeitsmarktprozesse untersuchen: Job Matching und berufliche Schließung. Um berufliche Regulierung empirisch abzubilden, verwenden wir einen innovativen Indikator und testen unsere Hypothesen mit deutschen Daten. Die Ergebnisse zeigen, dass je stärker die berufliche Regulierung bei sonst gleichen Bedingungen ist, desto weniger aufwändig gestaltet sich der Matching-Prozess für die Vertragspartner. Im Gegensatz dazu wird der Wechsel in eine neue Beschäftigung umso unwahrscheinlicher, je stärker ein Beruf reguliert ist." (Autorenreferat, IAB-Doku)

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Dauth, Wolfgang, Sebastian Findeisen, Enrico Moretti & Jens Südekum (2018): Matching in cities. (NBER working paper 25227), Cambrige, 65 S. DOI:10.3386/w25227

Abstract

"In most countries, average wages tend to be higher in larger cities. In this paper, we focus on the role played by the matching of workers to firms in explaining geographical wage differences. Using rich administrative German data for 1985-2014, we show that wages in large cities are higher not only because large cities attract more high-quality workers, but also because highquality workers are significantly more likely to be matched to high-quality plants. In particular, we find that assortative matching - measured by the correlation of worker fixed effects and plant fixed effects - is significantly stronger in large cities. The elasticity of assortative matching with respect to population has increased by around 75%in the last 30 years. We estimate that in a hypothetical scenario in which we keep the quality and location of German workers and plants unchanged, and equalize within-city assortative matching geographical wage inequality in Germany would decrease significantly. Overall, assortative matching magnifies wage differences caused by worker sorting and is a key factor in explaining the growth of wage disparities between communities over the last three decades.
If high-quality workers and firms are complements in production, moreover, increased assortative matching will increase aggregate earnings. We estimate that the increase in within-city assortative matching observed between 1985 and 2014 increased aggregate labor earnings in Germany by 2.1%, or 31.32 billion euros. We conclude that assortative matching increases earnings inequality across communities, but it also generates important efficiency gains for the German economy as a whole." (Author's abstract, IAB-Doku) ((en))

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Dickinson, David L., David Masclet & Emmanuel Peterle (2018): Discrimination as favoritism. The private benefits and social costs of in-group favoritism in an experimental labor market. In: European Economic Review, Jg. 104, H. May, S. 220-236. DOI:10.1016/j.euroecorev.2018.03.004

Abstract

"We examine both the private benefits and spillover costs of labor market favoritism in a unique laboratory experiment design. Our data show that both employment preference and wage offers favor in-group members. Workers positively reciprocate towards in-group employers by choosing higher effort in a gift-exchange game. Thus, favoritism can be privately rational for employers. However, unemployed subjects are allowed to burn resources (at a cost to themselves), and we document significantly increased resource destruction when unemployment can be attributed to favoritism towards others. This highlights a significant spillover and often ignored cost of favoritism, and it points to one possible micro-foundation of some antisocial behavior." (Author's abstract, © 2018 Elsevier) ((en))

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Eeckhout, Jan & Philipp Kircher (2018): Assortative matching with large firms. In: Econometrica, Jg. 86, H. 1, S. 85-132. DOI:10.3982/ECTA14450

Abstract

"Two cornerstones of empirical and policy analysis of firms, in macro, labor and industrial organization, are the determinants of the firm size distribution and the determinants of sorting between workers and firms. We propose a unifying theory of production where management resolves a tradeoff between hiring more versus better workers. The span of control or size is therefore intimately intertwined with the sorting pattern. We provide a condition for sorting that captures this tradeoff between the quantity and quality of workers and that generalizes Becker's sorting condition. A system of differential equations determines the equilibrium allocation, the firm size, and wages, and allows us to characterize the allocation of the quality and quantity of labor to firms of different productivity. We show that our model nests a large number of widely used existing models. We also augment the model to incorporate labor market frictions in the presence of sorting with large firms." (Author's abstract, IAB-Doku) ((en))

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Ehrenfried, Felix & Christian Holzner (2018): Dynamics and endogeneity of firms' recruitment behaviour. (CESifo working paper 7283), München, 51 S.

Abstract

"Models of random search, directed search, or stock-ow matching differ substantially in the way they assume that job seekers and firms behave during the recruitment process. In this paper we identify new patterns about the recruitment behaviour of firms using the entropy balancing technique and argue that stock-flow matching models - if suitably amended by a timeconsuming screening technology - are best able to explain why the vacancy-filling hazard is increasing during the planned search period and decreases thereafter, why most applicants arrive early in the recruitment process, and why the willingness to pay higher wages or to hire less qualified or experienced applicants increases for firms, which have been unlucky and unable to hire until the intended starting date." (Author's abstract, IAB-Doku) ((en))

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Gehrke, Britta & Enzo Weber (2018): Identifying asymmetric effects of labor market reforms. In: European Economic Review, Jg. 110, H. November, S. 18-40., 2018-07-17. DOI:10.1016/j.euroecorev.2018.07.006

Abstract

"This paper proposes a novel approach to identify structural long-term driving forces of the labor market and their short-run state-dependent effects. Based on search and matching theory, our empirical model extracts these driving forces within an unobserved components approach. We relate changes in the labor market structures to reforms that enhance the flexibility of the labor market in expansion and recession. Results for Germany and Spain show that labor market reforms have substantially weaker beneficial effects in the short run when implemented in recessions. From a policy perspective, these results highlight the costs of introducing reforms in recessions." (Author's abstract, © 2018 Elsevier) ((en))

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Hall, Robert E. & Andreas I. Mueller (2018): Wage dispersion and search behavior : The importance of nonwage job values. In: Journal of Political Economy, Jg. 126, H. 4, S. 1594-1637. DOI:10.1086/697739

Abstract

"We use a rich new body of data on the experiences of unemployed job seekers to determine the sources of wage dispersion and to create a search model consistent with the acceptance decisions the job seekers made. We identify the distributions of four key variables: offered wages, offered nonwage job values, job seekers' nonwork alternatives, and job seekers' personal productivities. We find that, conditional on personal productivity, the standard deviation of offered log wages is moderate, at 0.24, whereas the dispersion of the offered nonwage component is substantially larger, at 0.34. The resulting dispersion of offered job values is 0.38." (Author's abstract, IAB-Doku) ((en))

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Hoffman, Mitchell, Lisa B. Kahn & Danielle Li (2018): Discretion in hiring. In: The Quarterly Journal of Economics, Jg. 133, H. 2, S. 765-800. DOI:10.1093/qje/qjx042

Abstract

"Job-testing technologies enable firms to rely less on human judgment when making hiring decisions. Placing more weight on test scores may improve hiring decisions by reducing the influence of human bias or mistakes but may also lead firms to forgo the potentially valuable private information of their managers. We study the introduction of job testing across 15 firms employing low-skilled service sector workers. When faced with similar applicant pools, we find that managers who appear to hire against test recommendations end up with worse average hires. This suggests that managers often overrule test recommendations because they are biased or mistaken, not only because they have superior private information." (Author's abstract, IAB-Doku) ((en))

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Korulczyk, Tomasz & Natalia Korulczyk (2018): The role of fit theories in job analysis. In: A. Biela (Hrsg.) (2018): European Questionnaire for Job Analysis (EQJA) : Theoretical and methodological bases (Polish studies in economics, 12), S. 65-85.

Abstract

"The following work frames fit theory for job analysis. It presents various theoretical backgrounds of the fit theory, definitions, and types of fit along their coherent classification and the dynamic nature of the concepts. Finally, the text considers the use of EQIA in determining the level of various types of fit." (Author's abstract, IAB-Doku) ((en))

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Manoli, Dayanand S., Marios Michaelides & Ankur Patel (2018): Long-term effects of job-search assistance. Experimental evidence using administrative tax data. (NBER working paper 24422), Cambrige, Mass., 49 S. DOI:10.3386/w24422

Abstract

"This paper uses administrative tax data to examine the long-term effects of an experimental job-search assistance program operating in Nevada in 2009. The program required randomly-selected unemployed workers who had just started collecting unemployment insurance (UI) benefits to undergo an eligibility review and receive personalized job-counseling services. The program led to substantial short-term reductions in UI receipt, and to persistent, long-term increases in employment and earnings. The program also affected participants' family outcomes, including total income, tax filing, tax liability, and home ownership. These findings show that job-search assistance programs may produce substantial long-term effects for participants and their families." (Author's abstract, IAB-Doku) ((en))

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Marinescu, Ioana & Roland Rathelot (2018): Mismatch unemployment and the geography of job search. In: American Economic Journal. Macroeconomics, Jg. 10, H. 3, S. 42-70. DOI:10.1257/mac.20160312

Abstract

"Could we significantly reduce US unemployment by helping job seekers move closer to jobs? Using data from the leading employment board CareerBuilder.com, we show that, indeed, workers dislike applying to distant jobs: job seekers are 35 percent less likely to apply to a job 10 miles (mi.) away from their zip code of residence. However, because job seekers are close enough to vacancies on average, this distaste for distance is fairly inconsequential: our search and matching model predicts that relocating job seekers to minimize unemployment would decrease unemployment by only 5.3 percent. Geographic mismatch is thus a minor driver of aggregate unemployment." (Author's abstract, IAB-Doku) ((en))

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Mateos-Romero, Lucía & María del Mar Salinas-Jiménez (2018): Labor mismatches: Effects on wages and on job satisfaction in 17 OECD countries. In: Social indicators research, Jg. 140, H. 1, S. 369-391. DOI:10.1007/s11205-017-1830-y

Abstract

"This study analyzes the effects of labor mismatches on wages and on job satisfaction in seventeen OECD countries by distinguishing between educational mismatch and skills mismatch. Using data from PIAAC, the results suggest that whereas educational mismatch shows greater effects on wages, the effects of labor mismatch on job satisfaction are generally better explained by skills mismatches. Both phenomena appear to be relevant for understanding the economic effects of labor mismatch and suggest that educational mismatch is not an accurate proxy for skills mismatch, mainly when the non-monetary effects of labor mismatch are addressed." (Author's abstract, © Springer-Verlag) ((en))

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Obiols-Homs, F. & V. Sánchez-Marcos (2018): Education outcomes and the labor market. In: Labour economics, Jg. 54, H. October, S. 14-28. DOI:10.1016/j.labeco.2018.06.001

Abstract

"The quality of education appears to be negatively correlated with both the overeducation of workers at the tasks they perform and the unemployment rate across EU-15 countries, and positively correlated with the wage premium associated to tertiary education. We develop a model of the labor market with frictions to quantitatively investigate the impact of the education outcomes on the labor market. We show that both the ability of educated and non educated workers have sizable effects on the incentives of firms regarding the type of vacancies they open and also regarding the incentives of educated workers as of where to search for a job. Therefore education outcomes are relevant to understand the overeducation phenomena observed in the labor market. According to our quantitative analysis had the quality of education observed in Spain been similar to the European average then the overeducation rate would have been between 5 and 10 percentage points lower and the unemployment rate of the two types of workers would be reduced by 40%, but the tertiary education wage premium would be slightly smaller than in the benchmark economy." (Author's abstract, © 2018 Elsevier) ((en))

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Pohlan, Laura (2018): Essays on unemployment, job search behavior and policy interventions. Mannheim, XIV, 235 S.

Abstract

"This dissertation explores through which channels unemployment leads to exclusion from society and how policy interventions and technological innovations affect individual job search behavior and are able to bring unemployed persons back into the labor market. All four chapters contained in this dissertation are based on large individual-level data sets from Germany and aim at identifying causal relationships by employing different empirical methods. This thesis starts in the first chapter with an analysis of how job loss impacts different dimensions of social exclusion and shows that unemployment has detrimental economic and social effects. In the second chapter, which is co-authored by Annette Bergemann and Arne Uhlendorff, we study employment effects of participation in job creation schemes in the years after German reunification. We find that participation in job creation programs is beneficial for high skilled women in times of economic instability. In the third chapter, my co-authors Maximilian Blömer, Nicole Gürtzgen, Holger Stichnoth, Gerard van den Berg and I estimate an equilibrium job search model and simulate the introduction of different minimum wage levels. The results indicate that minimum wage effects on unemployment are non-linear and highly dependent on the labor market structure. In the last chapter, which is co-authored by Nicole Gürtzgen, André Nolte and Gerard van den Berg, we find that high-speed internet leads to higher reemployment probabilities with a certain time delay. This effect is particularly pronounced for unemployed males." (Author's abstract, IAB-Doku) ((en))

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Wapler, Rüdiger, Daniel Werner & Katja Wolf (2018): Active labour market policies in Germany. Do regional labour markets benefit? In: Applied Economics, Jg. 50, H. 51, S. 5561-5578., 2018-05-01. DOI:10.1080/00036846.2018.1487526

Abstract

"This article examines on a regional level whether active labour market policies (ALMP) improve the matching process. To take the fact of heterogeneous search effectiveness during programme participation into account, we distinguish between current and former programme participants. Our findings based on a regional augmented matching function show that higher search effectiveness due to ALMP is not outweighed by indirect effects on nonparticipants. The total number of matches in a region increases with a higher share of former programme participants among the jobseekers. However, these effects largely differ between programme types." (Author's abstract, IAB-Doku) ((en))

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Zaharieva, Anna (2018): On the optimal diversification of social networks in frictional labour markets with occupational mismatch. In: Labour economics, Jg. 50, H. March, S. 112-127. DOI:10.1016/j.labeco.2017.04.002

Abstract

"This paper incorporates social networks into a frictional labour market framework. There are two worker types and two occupations, which are subject to correlated fluctuations in output. The equilibrium is characterized by occupational mismatch which is associated with a wage penalty. Every worker has a fixed number of social contacts in the network. The fraction of contacts of the same occupational type defines homophily of the social network, so this paper investigates the optimal level of network homophily. Workers are risk-neutral and take aggregate variables as given, so their optimal individual choice is full homophily. This is different from the social planner's perspective. The planner internalizes external effects of workers' network choices on aggregate variables, so there exists a unique interior value of network homophily maximizing the present value of income. On the one hand, higher homophily is associated with lower occupational mismatch. But on the other hand, higher homophily separates the two groups of workers, prevents exchange of information about open vacancies, and leads to more unemployment, especially in recessions. So it is the trade-off between these two effects and not the desire to reduce income volatility, as in standard portfolio theory, which gives rise to network diversification. Comparative statics shows that optimal network homophily is lower and diversification is stronger with a lower wage penalty from mismatch, lower unemployment benefit and negative correlation in output fluctuations." (Author's abstract, © 2017 Elsevier) ((en))