This paper analyses how the levels of unemployment and vacancies affect the rate at which unemployed workers find employment -- the worker-firm `matching function'. In particular we test the robustness of previous empirical work by checking whether we obtain the same estimated function using...

This paper analyzes how the levels of unemployment and vacancies affect the rate at which unemployed workers find employment--the worker-firm 'matching function.' In particular, the authors test the robustness of previous empirical work by checking whether they obtain the same estimated function...

This paper models trading patterns when marketplaces exist and goods are differentiated. When first visiting the market, a buyer samples a stock of goods. If fortunate, the buyer finds a match, purchases one of these goods, and then exits. If not, the buyer can now only match with the flow of...

This paper considers new business start-up activity within a stochastic equilibrium model of unemployment. The resulting job creation process is both natural and tractable, and generates equilibrium unemployment and vacancy dynamics which match the volatility and persistence observed in the...

A new methodology is described which tests between various equilibrium theories of unemployment using matching data. The Paper shows how to correct econometrically for temporal aggregation effects, where the econometrician’s aim is to identify a matching process using data which is recorded...

We model educational investment, wages and employment status (full-time, part-time or non-participation) in a frictional world in which heterogeneous workers have different productivities, both at home and in the workplace. We investigate the degree to which there might be under-employment and...

The matching function describes the flow of job creation as a function of the stocks of unemployed and vacancies. Most empirical work tries to identify such a relationship by regressing the flow of matches (aggregated over the month) on the stocks of unemployment and vacancies measured at the...

We model educational investment and labour supply in a competitive economy with home and market production. Heterogeneous workers are assumed to have different productivities both at home and in the workplace. Following Rosen (1983), we show that there are private increasing returns to education...

This paper considers optimal educational investment and labour supply with increasing returns to scale in the earnings function In so doing we develop the work of Rosen (1983), who first highlighted the increasing returns argument that arises because private returns to human capital investment...

This paper considers an equilibrium model of unemployment in a labour market where all vacancies are advertised in a newspaper. Unemployment occurs in occupations that are short on vacancies. New vacancies are created by entrepreneurial search and investment, so it may take some time before an...