determine employment. Unions raise the efficiency costs of income redistribution, because unemployment benefits and income taxes … raise wage demands and thereby generate involuntary unemployment. Optimal unemployment benefits and optimal income taxes are …

where workers apply for just one job exhibits unemployment and absence of wage dispersion; (ii) an equilibrium where workers … apply for two or for more (but not for all) jobs always exhibits wage dispersion and, typically, unemployment; (iii) the … equilibrium wage distribution with a higher vacancy-to-unemployment ratio first-order stochastically dominates the wage …