@techreport{NBERw4472,
 title = "Cross Sectional Efficiency and Labor Hoarding in an Matching Model of   Unemployment",
 author = "Giuseppe Bertola and Ricardo J. Caballero",
 institution = "National Bureau of Economic Research",
 type = "Working Paper",
 series = "Working Paper Series",
 number = "4472",
 year = "1993",
 month = "September",
 URL = "http://www.nber.org/papers/w4472",
 abstract = {We study positive and normative aspects of steady-state equilibrium in a market where firms of endogenous size experience idiosyncratic shocks and undergo a costly search process to hire their workers.  The stylized model we propose highlights interactions between job-security provisions and sectoral shocks in determining the natural rate of unemployment, the allocation of labor, and the extent of labor hoarding, and rationalizes cross-sectional asymmetries of gross employment flows at the firm level.  In our model, where productivity and search costs are dynamically heterogeneous across firms, decentralized wage bargains imply important cross-sectional inefficiencies, which overshadow the static search inefficiencies on which simpler models focus.},
}