http://www.nber.org/papers/w10655


Search-Theoretic Models of the Labor Market-A Survey

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Richard Rogerson, Robert Shimer, Randall Wright

Richard Rogerson, Robert Shimer, Randall WrightNBER Working Paper No. 10655
Issued in July 2004
NBER Program(s):   EFG   LS

We survey search-theoretic models of the labor market and discuss their usefulness for analyzing labor market dynamics, job turnover, and wages. We first examine single-agent models, showing how they can incorporate many interesting features and generate rich predictions. We then consider equilibrium models that endogenize several variables that are treated parametrically in single-agent models, including the arrival rate of job offers and the wage distribution. We survey alternative formulations of these models, emphasizing two key issues: how workers and firms meet, and how wages are determined. We emphasize throughout the implications of alternative assumptions for turnover, wage dispersion, and efficiency.

Published: Rogerson, Richard, Robert Shimer and Randall Wright. "Search-Theoretic Models Of The Labor Market: A Survey," Journal of Economic Literature, 2005, v43(4,Dec), 959-988.

http://www.nber.org/papers/w15901



Search in Macroeconomic Models of the Labor Market

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Richard Rogerson, Robert ShimerNBER Working Paper No. 15901

This chapter assesses how models with search frictions have shaped our understanding of aggregate labor market outcomes in two contexts: business cycle fluctuations and long-run (trend) changes. We first consolidate data on aggregate labor market outcomes for a large set of OECD countries. We then ask how models with search improve our understanding of these data. Our results are mixed. Search models are useful for interpreting the behavior of some additional data series, but search frictions per se do not seem to improve our understanding of movements in total hours at either business cycle frequencies or in the long-run. Still, models with search seem promising as a framework for understanding how different wage setting processes affect aggregate labor market outcomes.

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Richard Rogerson, Robert ShimerNBER Working Paper No. 15901 Issued in April 2010 NBER Program(s):   EFG This chapter assesses how models with search frictions have shaped our understanding of aggregate labor market outcomes in two contexts: business cycle fluctuations and long-run (trend) changes. We first consolidate data on aggregate labor market outcomes for a large set of OECD countries. We then ask how models with search improve our understanding of these data. Our results are mixed. Search models are useful for interpreting the behavior of some additional data series, but search frictions per se do not seem to improve our understanding of movements in total hours at either business cycle frequencies or in the long-run. Still, models with search seem promising as a framework for understanding how different wage setting processes affect aggregate labor market outcomes. This paper is available as PDF (573 K) or via email. Machine-readable bibliographic record - MARC, RIS, BibTeX