This paper presents a theory explaining the labor market matching process through microeconomic incentives. There are … quit decisions. This approach obviates the need for a matching function. On this theoretical basis, we argue that the … matching function is vulnerable to the Lucas critique. Our calibrated model for the U.S. economy can account for important …

career. The model, which is designed to introduce optimal between-firm mobility, is based on the search, the matching, and … the human capital theory. It is emphasized that hopping from one wage trajectory to another by mobility may be accompanied …

search effort of unemployed workers reinforces our main results. -- Job search ; matching ; life cycle …