This paper extends the job market signaling model of Spence (1973) by allowing firms to learn the ability of their … select a unique separating equilibrium. When the Intuitive Criterion bites and information is purely asymmetric, the …

We show that in a search/matching model with endogenous participation in which workers are heterogeneous with respect …

that industrial agglomeration improves the quality of the firm-worker matching process. Our method makes use of recent … multiple sources of observed and unobserved heterogeneity we find little evidence that the quality of matching increases with …

labor market states. In steady-state, we hence have a theory of equilibrium unemployment determined by both matching …

employment prospects. We rely on exact matching to compare workers displaced due to firm closure with similar non …

We argue that using wage data alone, it is virtually impossible to identify whether Assortative Matching between worker … and firm types is positive or negative. In standard competitive matching models the wages are determined by the marginal …

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 …