TY  - JOUR
AU  - Lang,Kevin
AU  - Dickens,William T.
TI  - Bilateral Search as an Explanation for Labor Market Segmentation and Other Anomalies
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 4461
PY  - 1993
Y2  - September 1993
UR  - http://www.nber.org/papers/w4461
L1  - http://www.nber.org/papers/w4461.pdf
N1  - Author contact info:
Kevin Lang
Department of Economics
Boston University
270 Bay State Road
Boston, MA  02215
Tel: 617/353-5694
Fax: 617/353-4001
E-Mail: lang@bu.edu

William Dickens
School of Public Affairs
University of Maryland
College Park, Maryland  20742-1821
Tel: 301 405-3494
E-Mail: wtdickens@gmail.com
AB  - Since applying for jobs is costly, workers prefer applying where their employment probability is high and, therefore, to jobs attracting fewer higher quality applicants. Since creating vacancies is expensive, firms create more vacancies when job-seeking is high. Our model captures these ideas and accounts for worker heterogeneity by assuming three types of nearly identical workers. These infinitesimal quality differences generate a discrete wage distribution. For some parameter values lower quality workers have discretely lower wages and higher unemployment than better workers. Moreover, increasing the number of the lowest quality workers can make all workers better off.
ER  -