DP3466 A Matching Model of Crowding-Out and On-the-Job Search (with an Application to Spain)

Author(s): Juan J. Dolado, Marcel Jansen, Juan F Jimeno
Publication Date: July 2002
Keyword(s): crowding-out, matching, on the job search, unemployment
JEL(s): J41, J62
Programme Areas: Labour Economics
Link to this Page: www.cepr.org/active/publications/discussion_papers/dp.php?dpno=3466

This Paper considers a matching model of heterogeneous workers and jobs, which includes on-the-job search. High-educated workers transitorily accept unskilled jobs and continue to search for skilled jobs. We study the implications of this model for the unemployment rates of high and low-educated workers, for the share of mismatched workers and wage inequality both within and between skill groups. The model is used to shed light on the Spanish experience following a large educational upgrading since the mid-eighties.