The labor search and matching model plays a growing role in macroeconomic analysis. This paper provides a critical, selective survey of the literature. Four fundamental questions are explored: how are unemployment, job vacancies, and employment determined as equilibrium phenomena? What...

Routine-intensive occupations have been declining in many countries, but how does this affect individual workers' careers if this decline is particularly severe in their local labor market? This paper uses administrative data from Germany and a matched difference-in-differences approach to show...

I study the cyclical behavior of an equilibrium search model with endogenous job creation and destruction, with focus on the model's failure to match the observed cyclical volatility of unemployment. Job creation in the model is influenced by wages in new matches. I summarize microeconometric...

It is increasingly recognized that labour markets are pervasively imperfectly competitive, that there are rents to the employment relationship for both worker and employer. This chapter considers why it is sensible to think of labour markets as imperfectly competitive, reviews estimates on the...

Using a representative establishment dataset, this paper is the first to analyze the incidence of wage posting and wage bargaining in the matching process from the employer’s side. We show that both modes of wage determination coexist in the German labor market, with about two-thirds of...

Does the search and matching model fit aggregate U.S. labor market data? While the model has become an important tool of macroeconomic analysis, recent literature pointed to some failures in accounting for the data. This paper aims to answer two questions: (i) Does the model fit the data, and,...

This paper analyzes whether startups offer job opportunities to workers potentially facing labor market problems. It compares the hiring patterns of startups and incum-bents in the period 2003 to 2014 using administrative linked employer-employee data for Germany that allow to take the complete...

We show that worker wellbeing is not only related to the amount of compensation workers receive but also how they receive it. While previous theoretical and empirical work has often been pre-occupied with individual performance-related pay, we here demonstrate a robust positive link between the...

Reduced-form tests of scale effects in markets with search, run when aggregate matching functions are estimated, may miss important scale effects at the micro level, because of the reactions of job searchers. A semi-structural model is developed and estimated on a British sample, testing for...

This article argues in favor of drawing a distinction between the concepts of labour rationing and unemployment, the former referring to the occurrence of excess supply in a given labour market, the latter to job-waiting activity. In a first part, the literature on the possible consequences of...