Discussion Paper Details

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Title: On-the-Job Search in a Matching Model with Heterogeneous Jobs and Workers

Author(s): Juan J. Dolado, Marcel Jansen and Juan F Jimeno

Publication Date: October 2003

Keyword(s): job search, skills, unemployment and wage inequality

Programme Area(s): Labour Economics

Abstract: This paper considers a matching model with heterogeneous jobs (unskilled and skilled) and workers (low- and high-educated) which allows for on-the-job search by mismatched workers. The latter are high-educated workers who transitorily accept unskilled jobs and continue to search for skilled jobs. Our findings show that on-the-job search introduces an additional source of between- and within-group wage inequality. Furthermore, the higher quit rate of mismatched workers exerts a negative externality on unskilled jobs and weakens the labour market position of low-educated workers. This last feature changes the effects of skill-biased technological change and it alters the response of the labour market to shifts in the skill distribution.

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Bibliographic Reference

Dolado, J, Jansen, M and Jimeno, J. 2003. 'On-the-Job Search in a Matching Model with Heterogeneous Jobs and Workers'. London, Centre for Economic Policy Research.