Arbeitspapier
Selective hiring and welfare analysis in labor market models
Firms select not only how many, but also which workers to hire. Yet, in standard search models of the labor market, all workers have the same probability of being hired. We argue that selective hiring crucially affects welfare analysis. Our model is isomorphic to a search model under random hiring but allows for selective hiring. With selective hiring, the positive predictions of the model change very little, but the welfare costs of unemployment are much larger because unemployment risk is distributed unequally across workers. As a result, optimal unemployment insurance may be higher and welfare is lower if hiring is selective.
- Language
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Englisch
- Bibliographic citation
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Series: Kiel Working Paper ; No. 1752
- Classification
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Wirtschaft
Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
Unemployment Insurance; Severance Pay; Plant Closings
- Subject
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labor market models
welfare
optimal unemployment insurance
Arbeitsmarkttheorie
Arbeitsuche
Arbeitsnachfrage
Personalauswahl
Wohlfahrtseffekt
Arbeitslosenversicherung
Theorie
- Event
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Geistige Schöpfung
- (who)
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Merkl, Christian
van Rens, Thijs
- Event
-
Veröffentlichung
- (who)
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Kiel Institute for the World Economy (IfW)
- (where)
-
Kiel
- (when)
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2012
- Handle
- Last update
-
10.03.2025, 11:43 AM CET
Data provider
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Object type
- Arbeitspapier
Associated
- Merkl, Christian
- van Rens, Thijs
- Kiel Institute for the World Economy (IfW)
Time of origin
- 2012