Autore:
Herring, Robbin Titolo:
Hiring quality labourPeriodico:
European University Institute of Badia Fiesolana (Fi). Department of Economics - Working papersAnno:
1994 - Fascicolo:
36 - Pagina iniziale:
1 - Pagina finale:
32This paper presents an overlapping generations matching model in which firms have no reliable information
about an applicant's past employment history. Labour demand will then be a function of the perceived job quality of applicants and of the number of workers who quit and were fired. Workers when deciding to quit take account of their chances to be re-employed. This interconnection of hiring and quitting decisions can generate a type of sunspot equilibrium (here randomisations over perfect foresight paths) because of a quit/quality externality. However, even if such externalities are ignored because quitters have lagged or static expectations, deterministic cycles can occur. The results of this paper may support the view that the unemployed are 'stigmatised' by firms, in the sense that if there are fewer unemployed then they find it harder to get a job.
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