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Intermediary Organizations in Labor Markets

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  • Takayuki Oishi
  • Jun Tomioka
  • Shin Sakaue

Abstract

We propose a job matching model of intermediary labor markets by developing the seminal work of Kelso and Crawford (1982, Econometrica 50:1483-1504). Using this model, we show that for an arbitrary fixed broker-fee rate, the salary-adjustment process converges to a core allocation in intermediary labor markets where high-skilled workers are matched to high-technology firms by the private middleman and low-skilled workers are matched to low-technology firms by the public middleman. This result means that the dual labor market is emerged as a stable outcome of job-matching promoted by the private and public middlemen. Finally, we discuss empirical relevance of our theoretical model by using the data of job placement services in Japan.

Suggested Citation

  • Takayuki Oishi & Jun Tomioka & Shin Sakaue, 2018. "Intermediary Organizations in Labor Markets," Working Papers e124, Tokyo Center for Economic Research.
    • Handle: RePEc:tcr:wpaper:e124
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    References listed on IDEAS

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