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Directed search and job rotation

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  • Li, Fei
  • Tian, Can

Abstract

We consider the impact of job rotation in a directed search model in which firm sizes are endogenously determined and match quality is initially unknown. A large firm benefits from the opportunity to rotate workers so as to partially overcome the loss of mismatch. As a result, in the unique symmetric equilibrium, large firms have higher labor productivity and lower separation rates. In contrast to the standard directed search model with multi-vacancy firms, this model can generate a positive correlation between firm size and wage without introducing any ex ante productivity differences or imposing any non-concave production function assumptions.

Suggested Citation

  • Li, Fei & Tian, Can, 2013. "Directed search and job rotation," Journal of Economic Theory, Elsevier, vol. 148(3), pages 1268-1281.
    • Handle: RePEc:eee:jetheo:v:148:y:2013:i:3:p:1268-1281
    DOI: 10.1016/j.jet.2012.10.004
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Directed Search and Job Rotation
      by Christian Zimmermann in NEP-DGE blog on 2012-06-28 17:05:21

    Citations

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    Cited by:

    1. Koch, Michael & Egger, Hartmut, 2013. "Trade and the Firm-Internal Allocation of Workers to Tasks," VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79841, Verein für Socialpolitik / German Economic Association.
    2. Hakenes, Hendrik & Katolnik, Svetlana, 2017. "On the incentive effects of job rotation," European Economic Review, Elsevier, vol. 98(C), pages 424-441.
    3. Sheng Bi & Yuanyuan Li, 2016. "Holdup and hiring discrimination with search friction," Documents de travail du Centre d'Economie de la Sorbonne 16002, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    4. Ueno, Yuko, 2014. "Size-specific Effects in Job Reallocation and Worker Mobility: Japan’s Experience from the 1990s," CIS Discussion paper series 624, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
    5. Sheng Bi & Yuanyuan Li, 2016. "Holdup and hiring discrimination with search friction," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-01277548, HAL.
    6. Diego Battiston & Miguel Espinosa & Shuo Liu, 2021. "Talent Poaching and Job Rotation," Working Papers 1237, Barcelona School of Economics.
    7. Kuznetsov, Andrei & Dinwoodie, John & Gibbs, David & Sansom, Mark & Knowles, Harriet, 2015. "Towards a sustainability management system for smaller ports," Marine Policy, Elsevier, vol. 54(C), pages 59-68.
    8. Papageorgiou, Theodore, 2018. "Large firms and within firm occupational reallocation," Journal of Economic Theory, Elsevier, vol. 174(C), pages 184-223.
    9. Sheng Bi & Yuanyuan Li, 2016. "Holdup and hiring discrimination with search friction," Post-Print halshs-01277548, HAL.
    10. Morimitsu Kurino & Yoshinori Kurokawa, 2024. "Job rotation or specialization? A dynamic matching model analysis," Review of Economic Design, Springer;Society for Economic Design, vol. 28(2), pages 243-273, June.
    11. BI, Sheng & LI, Yuanyuan, 2015. "Holdup and hiring discrimination with search friction," MPRA Paper 65100, University Library of Munich, Germany.

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    More about this item

    Keywords

    Directed search; Job rotation; Firm size and wage; Firm size and labor productivity;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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