We analyse the efficiency of the labour market outcome in a competitive search equilibrium model with endogenous turnover and endogenous general human capital formation. We show that search frictions do not distort training decisions if firms and their employees are able to coordinate...

We analyse the efficiency of the labour market outcome in a competitive searchequilibrium model with endogenous turnover and endogenous general humancapital formation. We show that search frictions do not distort training decisionsif firms and their employees are able to coordinate efficiently,...

This paper proposes a labour market model with job search frictions where workers have private information on match quality and effort. Firms use wage contracts to motivate workers. In addition, wages are also used to attract employees. We define and characterize competitive search equilibrium...