This paper shows that we can normalize job and worker characteristics so that, without frictions,

This discussion paper has resulted in an article in 'Economica', 2002, 69(273), 21-40.

See 'On-The-Job Search, Mismatch and Efficiency', forthcoming in the 'Review of Economic Studies'.

This paper describes a search model with a continuum of worker and job types, free entry and transferable utility. We apply a second-order Taylor expansion to characterize the equilibrium, derive the "cost of search" and show that it is decreasing in the substitutability of worker types. This...