A number of studies have examined the impact of local labor market conditions on school dropout. However, none of them have considered the role of the industry structure. We construct data for a panel of Spanish regions and identify the effect of local labor markets using a variation of the...

We present a Search and Matching model with heterogeneous workers (entrants and incumbents) that replicates the stylized facts characterizing the US and the Spanish labor markets. Under this benchmark, we find the Post-Match Labor Turnover Costs (PMLTC) to be the centerpiece to explain why the...