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Efficiency in a search and matching model with participation policy

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  • Masters, Adrian

Abstract

This note presents a random search and matching model with ex ante heterogeneity in worker productivity. A Social Planner with the power to prevent labor market participation by the least productive is shown to increase economic efficiency. This is true even at the Hosios rule which, under worker homogeneity, implements the constrained efficient allocation.

Suggested Citation

  • Masters, Adrian, 2015. "Efficiency in a search and matching model with participation policy," Economics Letters, Elsevier, vol. 134(C), pages 111-113.
    • Handle: RePEc:eee:ecolet:v:134:y:2015:i:c:p:111-113
    DOI: 10.1016/j.econlet.2015.07.002
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    References listed on IDEAS

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    1. Albrecht, James & Navarro, Lucas & Vroman, Susan, 2010. "Efficiency in a search and matching model with endogenous participation," Economics Letters, Elsevier, vol. 106(1), pages 48-50, January.
    2. Christopher A. Pissarides, 2000. "Equilibrium Unemployment Theory, 2nd Edition," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262161877, April.
    3. Arthur J. Hosios, 1990. "On The Efficiency of Matching and Related Models of Search and Unemployment," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 57(2), pages 279-298.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Stanislav Rabinovich & Ronald Wolthoff, 2020. "Misallocation Effects of Labor Market Frictions," Working Papers tecipa-662, University of Toronto, Department of Economics.
    2. Miroslav Gabrovski & Victor Ortego-Marti, 2025. "Home Construction Financing and Search Frictions in the Housing Market," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 55, January.
    3. Griffy, Benjamin & Masters, Adrian, 2022. "Labor market policy in the presence of a participation externality," European Economic Review, Elsevier, vol. 144(C).
    4. Julien, Benoît & Mangin, Sephorah, 2017. "Efficiency of job creation in a search and matching model with labor force participation," Economics Letters, Elsevier, vol. 150(C), pages 149-151.
    5. Miroslav Gabrovski & Victor Ortego-Marti, 2021. "Efficiency in the Housing Market with Search Frictions," Working Papers 202108, University of California at Riverside, Department of Economics.
    6. Rabinovich, Stanislav & Wolthoff, Ronald, 2022. "Misallocation inefficiency in partially directed search," Journal of Economic Theory, Elsevier, vol. 206(C).
    7. Makoto Masui, 2020. "Efficiency in a search and matching model with endogenous labor participation and different skill groups," Economics Bulletin, AccessEcon, vol. 40(4), pages 2648-2653.
    8. Markus Gebauer, 2021. "Complementary jobs and optimal matching," LABOUR, CEIS, vol. 35(3), pages 291-310, September.

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    More about this item

    Keywords

    Search; Matching; Efficiency;
    All these keywords.

    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
    • D6 - Microeconomics - - Welfare Economics

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