In this Paper, an explicit micro scenario is developed which yields a well-defined aggregate job-matching function. In particular, a stochastic model of job-matching behaviour is constructed in which the system steady state is shown to be approximated by an exponential-type matching function, as...

We show how small initial wealth differences between low skilled black and white workers can generate large differences in their labour-market outcomes. This even occurs in the absence of a taste for discrimination against blacks or exogenous differences in the distance to jobs. Because of the...

The aim of this Paper is to provide a new mechanism for the spatial mismatch hypothesis. Spatial mismatch can here be the result of optimizing behaviour on the part of the labour market participants. In particular, the unemployed can choose low amounts of search and long-term unemployment if...

In this paper, an explicit micro scenario is developed which yields a well-defined aggregate job matching function. In particular, a stochastic model of job-matching behavior is constructed in which the system steady state is shown to be approximated by an exponential-type matching function, as...