This paper characterizes the equilibrium for a large class of search models with two-sided heterogeneity and on-the-job search. Besides the well-known congestion externalities, we show that on-the-job search in combination with monopsonistic wage setting without commitment creates a...

In this paper I determine the importance of adjustment costs in employers' hiring decisions. Temporary work arrangements offer potential ways to avoid adjustment costs. I estimate employers willingness to pay for the characteristics of these work arrangements. I distinguish regular contracts,...

This paper first documents the increase in the time lag with which labor input reacts to output fluctuations (the labor adjustment lag) that is visible in US data since the mid-1980s. We show that a lagged labor adjustment response is optimal in a setting where there is uncertainty about the...

In this paper we derive a structural measure for labor market density based on the Ellison and Glasear (1997) "Index for industry concentration". This labor market density measure serves as a proxy for the number of workers that can reach a certain work area within a reasonal amount of traveling...

We develop a two-sector endogenous growth model with a dual labour market resulting from the presence of an effort extraction function in one sector. Effort of workers can be influenced by pay and monitoring. This results in an endogenous non-competitive wage differential between sectors and a...

Empirical studies of labor markets show that social contacts are an important source of job-related information [Ioannides and Loury (2004)]. At the same time, wage differences among workers may be explained only in part by differences in individual background characteristics. Such findings...