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The Cambridge-INET Institute - continuing as the Janeway Institute


Keith Chan (Cambridge)

"Redistributive Effects of Labour Market Frictions"

Abstract: In a simple search and matching model, the two sides of the market differ only by population inflow, with more workers than vacancies entering the market each period. I show that various market frictions have opposite effects on the two sides of the market. In particular, the short side always benefits from lower frictions while the long side may suffer. This contrasts with the standard conclusion of Diamond-Mortensen-Pissarides labour search model, but aligns with recent empirical evidence.

When: Monday 8th March 2021 - 1:00pm

Where: Zoom

Reading Group: Theory Workshop

Theme: information