UNEMPLOYMENT AND MARKET SIZE

• 成果类型: Article
• 署名作者: Ellison, Martin; Keller, Godfrey; Roberts, Kevin; Stevens, Margaret
• 署名单位: University of Oxford
• 刊物名称: ECONOMIC JOURNAL
• ISSN/ISSBN: 0013-0133
• DOI: 10.1111/ecoj.12043
• 发表日期: 2014
• 页码: 119-148
• 关键词: labor-market; equilibrium unemployment; cyclical behavior; Matching function; business cycles; job destruction; search; MODEL; EFFICIENCY; returns

摘要

Without strong empirical support, labour market matching models typically assume constant returns to scale in matching. We construct a tractable equilibrium random matching model with a general matching technology, introducing market size effects: the job-finding rate varies with unemployment. Stable steady-states may occur in regions of increasing or decreasing returns, and multiple equilibria are welfare-ranked by market size. While the standard model relies on high-frequency shocks to the steady state to explain the co-movement of unemployment and job-finding, locally decreasing returns in matching generate plausible adjustment dynamics and slower convergence. Lastly, an extension of the Hosios condition internalises search externalities.