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 …

possibility of differential productivity across occupations. The model combines moral hazard and matching of physicians and … occupations with pre-matching investments. In equilibrium assortative matching takes place; more able physicians join occupations … less exposed to moral hazard risk, face more powerful performance incentives, and are more productive. Under-consumption of …

A main prediction of agency theory is the well known risk-incentive trade-off. Incentive contracts should be found in …

bargaining in the matching process from the employer's side. We show that both modes of wage determination coexist in the German …

With the growth of the Internet, online job portals have become an important medium for job matching. This paper …

This paper presents a tractable framework for studying frictionless matching in school, work, and marriage when … communicate and coordinate at lower resource cost. The theory delivers full task specialization in the labor and education markets …, but incomplete specialization in marriage. It also captures well-known matching patterns in each of these sectors …