EFFICIENT SORTING IN FRICTIONAL LABOR MARKETS WITH TWO-SIDED HETEROGENEITY

2014 ◽  
Vol 20 (1) ◽  
pp. 95-119 ◽  
Author(s):  
Luca Paolo Merlino

This paper studies how search externalities and wage bargaining distort vacancy creation and the allocation of workers to jobs in markets with two-sided heterogeneity. To do so, I propose a model of a frictional labor market where heterogeneous workers decide which job to look for and firms decide which technology to adopt. At equilibrium, there is perfect segmentation across sectors, which is determined by a unique threshold of workers' productivity. This threshold is inefficient because of participation and composition externalities. The Pigouvian tax scheme that decentralizes optimal sorting shows that these externalities have opposite signs. Furthermore, their relative strength depends on the distribution of workers' skills, so that when there are many (few) skilled workers, too many (few) high-technology jobs are created.

2014 ◽  
Vol 19 (5) ◽  
pp. 1116-1147 ◽  
Author(s):  
Alessia Campolmi ◽  
Ester Faia

Currency fluctuations are an important determinant of labor market dynamics. Vice versa, relative labor costs affect real exchange rate dynamics. The optimal choice of exchange rate regimes cannot neglect this nexus. We assess such a choice using a two-country model with frictional labor markets. The monetary authority faces a tension between the classical insulating property of floating exchange rates and the destabilizing effects of currency fluctuations on (relative) job flows. Results show that the second motive is important: optimal monetary policy prescribes (some) response to the exchange rate. We also reexamine the conditions for optimal policy in a currency area whose members experience asymmetries in labor market institutions.


Author(s):  
O. Borodiyenko ◽  
L. Milto ◽  
І. Kamenska ◽  
O. Bokshyts ◽  
V. Malykhina

Abstract. The purpose of the article is to highlight the problems of providing regional labor markets with qualified personnel and identify ways of effective interaction between educational institutions and enterprises. The theoretical significance of the article is that it, based on an experimental study conducted in the Donetsk region, analyzed the reasons for dissatisfaction of enterprises with the quality of professional training; the existing experience of cooperation between educational institutions and enterprises of the region is analyzed; barriers have been identified that prevent the establishment of an effective partnership between educational institutions and enterprises aimed at meeting the existing and future needs of the labor market in qualified personnel; the level of readiness of enterprises of the region to cooperate with institutions in the direction of modernization of material and technical base, internship of teachers, joint preparation of educational programs, advanced training of personnel is analyzed; on the basis of the analysis of results of survey it was identified professions for which it is advisable to start professional traininin in vocational institutions in Donetsk region; the model of competencies of the future skilled worker elaborated by employers is presented (on the example of the profession «Locksmith for repair of wheeled vehicles. Driver of motor vehicles (category «C»). Machinist of a truck crane»). The practical significance of the article is that based on the opinion of employers of Donetsk region, the authors offer recommendations to improve the interaction between educational institutions and enterprises of Donetsk region to solve the problem of professional training for current and future needs of the region’s economy. The presented recommendations and research model can be extrapolated to the effective development of labor markets in other regions of the country. It was revealed that the modern labor market in particular in Donetsk region is characterized by significant disparities between demand and supply of personnel (almost all vacancies in terms of occupations have a deficit, i.e. supply (number of unemployed) exceeds demand). There is a great lack of vacancies in the professions of auxiliary worker, driver of vehicles, seller of food products, seller of non-food products, cook. Instead, the scarce professions that are in demand in the labor market are a machinist bypassing turbine equipment, a locksmith repairing steam and gas turbine equipment, a machinist bypassing boiler equipment, an electrician servicing electrical installations, a kneading machine operator, a plumber, a nanny, an electrician for repair and installation of cable lines, a pipe and billet cutter, an extruder of refractory products. It is determined that the system of training of future skilled workers in educational institutions of the region needs significant modernization, as there are currently significant discrepancies between the level of preparation of graduates for professional activities and the requirements of employers. The difficulty of adaptation of graduates in the workplace is associated with the lack of certain professional competencies and personal qualities, the development of which should be paid attention to in the process of initial professional training in educational institutions — practical training, experience, practical knowlwdge), motivation to work. Deficits are also responsibility, independence, purposefulness, level of qualification. It was found that cooperation between educational institutions and employers is still carried out in traditional forms — the internships of students of educational institutions on the basis of enterprises, the participation of employees in assessing the quality of training. The prevalence of formal interaction significantly determines the quality of training for the needs of regional labor markets. The directions of personnel professional training for actual and perspective needs of the region labour market are singled out: excavator driver, car mechanic, electric gas welder, locksmith-repairman, electrician, turner, crane driver, confectioner cooker. The structure of the competency model of future skilled workers was identified — basic and professional competencies — that will ensure rapid adaptation and effective work of graduates at enterprises of the region. It is determined that for the effective development of regional labor markets and effective training for them the key is to implement the idea of public-private partnership of educational institutions and employers, the most effective forms of which should be cooperation in curricula development, advising on their content, methods and technologies of the educational process, providing recommendations for updating equipment, providing teaching materials, assistance in updating the library fund, databases, to ensure the educational process in the institution (invitation of so-called guest speakers), professional development of teachers and masters of industrial training, joint project activities, implementation of career guidance activities, organization of excursions of students and entrants to enterprises, informing about employment opportunities at enterprises, lobbying the interests of the institution at the level of local governments, participation in determining the development strategy of the institution, assistance in the process of attraction of additional sources of financing, creation of advisory bodies of the educational institution (advisory committee in the specialty, supervisory boards, etc.). Keywords: regional labor markets, professional training, educational institutions, institutions of professional (vocational) education, efficiency, professional training. JEL Classification I21, L33 Formulas: 0; fig.: 0; tabl.: 0; bibl.: 9


Author(s):  
Bernd Fitzenberger

SummaryBuilding on a Heckscher-Ohlin-Samuelson framework with factor price rigidities, this paper provides an empirical analysis of the relationship between trade, technical progress, and the labor market in West Germany for the period from 1970 until 1990. The analysis builds on relative product prices as the major transmission channel of trade effects on the labor market and allows for three skill types of labor. The major findings are that, relative to skilled labor, wages were increasing disproportionately both for low- and high-skilled labor whereas employment trends were favoring higher skill levels monotonically. Import competition as well as total factor productivity were increasing disproportionately in those industries using low- or high-skilled labor intensively. These results are consistent with trade effects dominating for low-skilled labor and technology effects for high-skilled labor while wage bargaining institutions were holding up relative wages of low-skilled labor. The combined effect accounts for the disproportionate increase of unemployment for low-skilled workers.


2021 ◽  
Author(s):  
◽  
Tim Hagenhoff

What are the implications of simple deviations from rational expectations for macroeconomic dynamics, monetary policy, consumption decisions and labor markets? Which biases underly even sophisticated survey expectations? I aim to answer these questions by building upon simple mathematical models of expectations that are boundedly rational and generate some disagreement across expectations. While monetary policy should be extraordinarily hawkish if it wants to control inflation under such expectations, it also generates substantial dispersion in consumption and wealth. Further, the sluggishness of labor market variables may be explained by sluggish expectations that affect, for instance, wage bargaining. Finally, expectations of professional forecasters are intrinsically persistent, depend on the last observed consensus forecast and also extrapolate current news more than would be rational.


2021 ◽  
pp. 61-75
Author(s):  
Eric A. Posner

In many labor markets, only one or a small number of employers offer jobs to workers. In these markets, employers maximize profits by suppressing wages, and likely do so. Yet antitrust litigation against labor monopsonists is extremely rare and almost never successful. The paucity of cases has left workers with possible claims in a difficult position; in the absence of developed law, lawyers are reluctant to take cases. Congress should reform the antitrust laws to strengthen the legal tools available to workers who seek to challenge wage suppression by monopsonists. A first step is for Congress (or regulators) to offer guidelines to help courts understand how a labor market is defined, and what sorts of conduct should be regarded as anticompetitive.


2020 ◽  
Vol 12 (2) ◽  
pp. 194-240
Author(s):  
Eric T. Swanson

A flexible labor margin allows households to absorb asset value shocks with changes in hours worked, altering the households’ attitudes toward risk (Swanson 2012). This paper analyzes how frictional labor markets affect that analysis. Risk aversion is higher (i) in countries with more frictional labor markets, (ii ) in recessions, and (iii ) for households that have more difficulty finding a job. Labor market frictions in Europe are large enough to raise risk aversion in those countries. Nevertheless, risk aversion in the United States and Europe is much closer to the frictionless benchmark in Swanson (2012) than to traditional, fixed-labor measures. (JEL D11, D81, E24, E32, J22)


2004 ◽  
pp. 76-94 ◽  
Author(s):  
V. Gimpelson

The article discusses the issue of shortage of skills in the Russian industry. Using microdata from a survey of industrial enterprises, the author confirms that most of employers complain of difficulties in hiring and attaching skilled workers. In case of mass occupations, this shortage relates mostly to low efficient enterprises, which are unable or unwilling to pay competitive market going wage. More efficient and better paying firms are less likely to face shortage of general skills on the labor market but may face limited supply of specific skills.


2016 ◽  
Vol 11 (18) ◽  
Author(s):  
Camilo Contreras Delgado

Resumen:Este artículo examina los fa c t o res internos y externos a una localidad que son copartícipes en la estructuración y reestructuración de su mercado de trabajo local. A partir de la revisión de la historia social y económica del lugar, se destaca su tránsito de enclave minero a lugar de residencia de mineros y trabajadores de maquiladoras. En este caso, se presenta la constitución de los mercados de trabajo locales como un resultado del encuentro de las condiciones del lugar de residencia de los trabajadores y el lugar donde se encuentra el centro de trabajo. De aquí que la movilidad laboral geográfica aparezca como una de las tácticas de los sujetos ante una situación de desempleo.Palabras clave: Mercado de trabajo, Minería, Maquiladoras, Mineros, Movilidad laboral, Desempleo.Abstract:This article examines the internal and external local factors shaping the structuring and restructuring of a local labor market. By reviewing the social and economic history of the community, this article underlines its transition from a mining setting to a residence place for miners and maquila workers. In this case, the constitution of local labor markets is presented as a result of the condition encounter of both workers residence place and the location of the work place. This is a reason explaining why geographical labor mobility comes to be an actor tactic to face unemployment.Key words: Labor market, Mining, Export-oriented industry, Miners, Labor mobility, Unemployment.


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