This paper studies the quantitative properties of a multiple-worker firm matching model with on-the-job search where heterogeneous firms operate decreasing-returns-to-scale production technology. The authors focus on the model's ability to replicate the business cycle features of job flows,...

In this paper we build a theoretical model to show the role of self-confidence in leading to inefficient job matching equilibria: under-confident highly-qualified workers do not apply for highly-skilled jobs, because mistakenly perceive themselves as having relatively lower abilities with...

Worker flows and job flows behave differently over the business cycle. We investigate the sources of the differences by studying quantitative properties of a multiple-worker version of the search/matching model that features endogenous job separation and intra-firm wage bargaining. Our...

The theory of the dynamics of labor demand is based either on the costs of adjusting the level of employment or on the costs of hiring or firing (of gross changes in employment). We write down a generalized cost of adjustment function that includes both types of cost and allows for asymmetries...