This paper studies the optimal factor tax incidence in a neoclassical growth model with a given share of government expenditure in output. In the Ramsey planner’s optimization, the effect of next period’s capital on government expenditure equals the given share of the marginal product of...

We present a theory of targeted search, where people with a finite information processing capacity search for a match. Our theory explicitly accounts for both the quantity and the quality of matches. It delivers a unique equilibrium that resides in between the random matching and the directed...

I develop a directed search model of the labor market in which firms choose a recruiting intensity, determining the number of applicants they will interview. Interviewing applicants is costly but reveals their productivity, allowing the firm to hire better workers. I characterize the equilibrium...

We analyse a model of equilibrium directed search in a large labour market. Each worker, observing the wages posted at all vacancies, makes a fixed, finite number of applications, a. We allow for the possibility of ex post competition should more than one vacancy want to hire the same worker....

One of the services provided at the Swedish Public Employment Services is job coaching. Since 2012, that service has been organized according to a voucher-based choice system. In 2013, a performance indicator of job coaching providers was made available at an online website. This study examines...

This paper investigates the interaction between education decisions by workers and investment decisions by firms in a random matching model with endogenous heterogeneity. I analyze the efficiency properties of the equilibrium and find that in the presence of search frictions and investment costs...

We present a competing-auction theory of the labor market, where job candidates auction their labor services to employers. An equilibrium matching function emerges which has many of the features commonly assumed, including constant returns to scale in large economies. The auction mechanism also...

In a search and matching model with right-to-manage bargaining, matched workers and firms bargain over wages, given labor demand schedule of firms for hours worked per worker. Wages and hours worked per worker are determined as if they are determined in a competitive labor market with a...

This paper investigates the efficiency of investments by firms and workers in a matching model with high- and low-productivity jobs. Search is sector specific and random within sectors. Search frictions and ex-post bargaining imply that wage inequality arises as a result of the difference in...

We study a search model where workers can send multiple applications to high and low productivity firms. Firms that compete for the same candidate can increase their wage offers as often as they like. We show that there is a unique equilibrium where workers mix between sending both applications...