In this paper we develop and quantitatively assess a tractable equilibrium search model of the labour market to analyse the long-term wage costs of a job loss. In our framework, these costs occur due to losses in workers' human capital and firm specific compensation, interruptions to workers'...

We analyze an equilibrium labor market with on‐the‐job search and experience effects (as workers learn by doing). The analysis yields a Mincer wage equation with worker fixed effects and endogenously determined firm fixed effects. Equilibrium sorting - where over time more experienced...