Carlos Carrillo-Tudela

HUMAN CAPITAL ACCUMULATION AND LABOR MARKET EQUILIBRIUM

The objective of this paper is to analyse an equilibrium search model with on-the-job search and human capital accumulation. In our model wages are disperse because firms pay workers of the same productivity different wages and workers of different productivies earn different wages. New entrants to the labour market increase their wages mainly through on-the-job search. As workers gain more experience and move up the offer distribution, job-to-job transitions become less frequent and human capital accumulation dominates wage growth. This interaction generates a wage distribution that exhibits a density with a unique mode and a long and decreasing right tail as observed in the data.

Worker Mobility in a Search Model with Adverse Selection

We analyze the effects of adverse selection on worker turnover and wage dynamics in a frictional labor market. We consider a model of on-the-job search where firms offer promotion wage contracts to workers of different abilities, which is unknown to firms at the hiring stage. With sufficiently strong information frictions, low-wage firms offer separating contracts and hire all types of workers in equilibrium, whereas high-wage firms offer pooling contracts, promoting high-ability workers only. Low-ability workers have higher turnover rates and are more often employed in low-wage firms. The model replicates the negative relationship between job-to-job transitions and wages observed in the U.S. labor market.

JOB SEARCH WITH BIDDER MEMORIES

This paper revisits the no-recall assumption in job search models with take-it-or-leave-it offers. Workers who can recall previously encountered potential employers in order to engage them in Bertrand bidding have a distinct advantage over workers without such attachments. Firms account for this difference when hiring a worker. When a worker first meets a firm, the firm offers the worker a sufficient share of the match rents to avoid a bidding war in the future. The pair share the gains to trade. In this case, the Diamond paradox no longer holds.

Quit Turnover and the Business Cycle: A Survey

The focus of this chapter is to consider new developments in the search and matching literature where wages, quit turnover and unemployment are endogenously determined in economies with aggregate shocks. The aim of the discussion is not only to highlight possible market failures but also to explain how on-the-job search and employee turnover fundamentally affect our understanding of fluctuations in aggregate employment.