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Job Matching with Multiple-Hiring Firms and Heterogeneous Workers: A Microfoundation

Author

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  • Kenjiro Hori

    (Department of Economics, Mathematics & Statistics, Birkbeck)

Abstract

The traditional search models that consider coordination failure of firms consisting of single jobs, are inadequate when applied to large firms. In this paper a firm-level matching function is derived for firms with multiple vacancies, by introducing heterogeneity in jobs and workers. Firms face diminishing returns to hiring success, which allows us to determine firm-size endogenously. The derived aggregate matching function exhibits constant returns to scale. The main macroeconomic results of the traditional search models are also shown to survive in this model of large firms. The paper thus provides a microfoundation to the macroeconomic job-matching literature.

Suggested Citation

  • Kenjiro Hori, 2005. "Job Matching with Multiple-Hiring Firms and Heterogeneous Workers: A Microfoundation," Birkbeck Working Papers in Economics and Finance 0514, Birkbeck, Department of Economics, Mathematics & Statistics.
    • Handle: RePEc:bbk:bbkefp:0514
    as

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    File URL: https://eprints.bbk.ac.uk/id/eprint/27041
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    frictional labour market; matching function; heterogeneity;
    All these keywords.

    JEL classification:

    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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