This paper develops a search model of the labor market in which uncertainty about job finding probabilities leads unemployed to become discouraged and exit the labor market. Negative updating after unsuccessful search implies that the beliefs of the unemployed about themselves, and consequently their subjective job finding probabilities, decline with unemployment duration. The assumptions about...

In this study we consider a labor market matching model where firms post wagetenure contracts and workers, both employed and unemployed, search for new job opportunities. Given workers are risk averse, we establish there is a unique equilibrium in the environment considered. Although firms in the market make different offers in equilibrium, all post a wage-tenure contract that implies a worker’...

We propose a simple three-stage model where heterogeneous schools compete via tuition fees, individuals with the ex-ante unknown ability make their education choices to (eventually) get diploma and reveal ability, finally job market determines assignment of workers firms equilibrium wages. In equilibrium, wages in labor schools’ fees individuals’ school are strongly related. also analyze effect...

In models of search on the job (e.g. Kenneth Burdett and Dale Mortensen 1998, Burdett and Melvyn Coles 2003, Alain Delacroix and Shouyong Shi 2006), employed and unemployed workers search the labor market for job openings. Workers who are unemployed are willing to accept any job that makes them better off than enjoying leisure and continuing to search. Workers who are employed are willing to ac...