This website uses cookies.

By clicking the "Accept" button or continuing to browse our site, you agree to first-party and session-only cookies being stored on your device to enhance site navigation and analyze site performance and traffic. For more information on our use of cookies, please see our Privacy Policy.

  1. Home
  2. Journals
  3. Journal of Economic Literature
  4. December 2005
  5. Search-Theoretic Models of the Labor Market: A Survey

Journal of Economic Literature

ISSN 0022-0515 (Print) | ISSN 2328-8175 (Online)

Search-Theoretic Models of the Labor Market: A Survey

  • Richard Rogerson
  • Robert Shimer
  • Randall Wright
Journal of Economic Literature
vol. 43, no. 4, December 2005
(pp. 959–988)
Download Full Text PDF

Abstract

We survey the literature on search-theoretic models of the labor market. We show how this approach addresses many issues, including the following: Why do workers sometimes choose to remain unemployed? What determines the lengths of employment and unemployment spells? How can there simultaneously exist unemployed workers and unfilled vacancies? What determines aggregate unemployment and vacancies? How can homogeneous workers earn different wages? What are the tradeoffs firms face from different wages? How do wages and turnover interact? What determines efficient turnover? We discuss various modeling choices concerning wage determination and the meeting process, including recent models of directed search.

Citation

Rogerson, Richard, Robert Shimer, and Randall Wright. 2005. "Search-Theoretic Models of the Labor Market: A Survey." Journal of Economic Literature, 43 (4): 959–988. DOI: 10.1257/002205105775362014

JEL Classification

  • J22 Time Allocation and Labor Supply
  • J31 Wage Level and Structure; Wage Differentials
  • J41 Labor Contracts
  • J63 Labor Turnover; Vacancies; Layoffs