Carrillo-Tudela, C (2004) Recruitment Policy When Firms Observe Workers' Employment Status: an Equilibrium Search Approach. UNSPECIFIED. University of Essex, Department of Economics, Economics Discussion Papers 584.
Carrillo-Tudela, C (2004) Recruitment Policy When Firms Observe Workers' Employment Status: an Equilibrium Search Approach. UNSPECIFIED. University of Essex, Department of Economics, Economics Discussion Papers 584.
Carrillo-Tudela, C (2004) Recruitment Policy When Firms Observe Workers' Employment Status: an Equilibrium Search Approach. UNSPECIFIED. University of Essex, Department of Economics, Economics Discussion Papers 584.
Abstract
This paper considers an equilibrium search model, where firms use information on a worker's labour market status when recruiting new hires, and all workers search for a job. We show that firms segment their workforce in two. Unemployed workers are offered a lower wage than the workers they recruit from employment in a competing firm even when these workers have the same productivity. The unique equilibrium is given by the Diamond outcome in the market for unemployed workers and the Burdett and Mortensen (B-M) outcome in the market for employed workers. We show that the offer and earnings distributions derived in the model are first order stochastically dominated by the ones given in B-M and all workers are worse off. We also show that in this environment information on employment status is sufficient for firms to obtain the same profits as if they had complete information about workers' reservation wages and outside offers.
Item Type: | Monograph (UNSPECIFIED) |
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Uncontrolled Keywords: | HB; |
Subjects: | H Social Sciences > HB Economic Theory |
Divisions: | Faculty of Social Sciences Faculty of Social Sciences > Economics, Department of |
SWORD Depositor: | Unnamed user with email elements@essex.ac.uk |
Depositing User: | Unnamed user with email elements@essex.ac.uk |
Date Deposited: | 03 Jul 2012 15:37 |
Last Modified: | 16 May 2024 18:37 |
URI: | http://repository.essex.ac.uk/id/eprint/2732 |
Available files
Filename: dp584.pdf