TY  - JOUR
AU  - Shimer,Robert
TI  - The Assignment of Workers to Jobs In an Economy with Coordination Frictions
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 8501
PY  - 2001
Y2  - October 2001
UR  - http://www.nber.org/papers/w8501
L1  - http://www.nber.org/papers/w8501.pdf
N1  - Author contact info:
Robert Shimer
Department of Economics
University of Chicago
1126 East 59th Street
Chicago, IL 60637
Tel: 773/702-9015
E-Mail: shimer@uchicago.edu
AB  - This paper studies the assignment of heterogeneous workers to heterogeneous jobs in the presence of coordination frictions. Firms offer human-capital-contingent wages, workers observe these and apply for a job. In a symmetric equilibrium, identical workers use identical mixed strategies in deciding where to apply, and the randomness introduced by mixed strategies generates equilibrium unemployment and vacancies. The equilibrium can be interpreted as the competitive equilibrium of a closely related model, ensuring constrained efficiency. The model generates a rich interaction between the heterogeneous workers and firms. Firms attract applications from multiple types of workers, and earn higher profits when they hire a more productive worker. Identical workers apply for jobs with different productivity and get higher wages when they land a more productive job. Despite this mismatch, I show that in some special cases, the model generates assortative matching, with a positive correlation between matched workers' and firms' productivity.
ER  -