This paper presents a test of the educational signaling hypothesis. If employers use education as a signal in the …

labor market states. In steady-state, we hence have a theory of equilibrium unemployment determined by both matching …

This paper presents a theory explaining the labor market matching process through microeconomic incentives. There are … quit decisions. This approach obviates the need for a matching function. On this theoretical basis, we argue that the … matching function is vulnerable to the Lucas critique. Our calibrated model for the U.S. economy can account for important …