Publication Type
Working Paper
Version
publishedVersion
Publication Date
9-2007
Abstract
This paper considers the efficiency properties of risk-neutral workers’ mobility decisions in an equilibrium model with search frictions, but no search externalities, when the rent accruing to a match is split through bargaining. Matches are ex ante homogeneous and their true productivity is learnt after the match is formed. It is shown that the efficiency of worker turnover depends on contract enforceability, and that in the absence of complete enforceability the equilibrium fails to be efficient. This is because without complete enforceability firms cannot credibly offer workers contracts that will guarantee them the entire future of all potential future matches.
Keywords
On-the-Job Search, Learning, Bargaining, Contracts, Enforceability.
Discipline
Labor Economics
Research Areas
Applied Microeconomics
First Page
1
Last Page
31
Publisher
SMU Economics and Statistics Working Paper Series, No. 17-2007
City or Country
Singapore
Citation
JACQUET, Nicolas L..
Inefficient Worker Turnover. (2007). 1-31.
Available at: https://ink.library.smu.edu.sg/soe_research/1057
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.