It's about time: : implications of the period length in an equilibrium search model

• Autores: Ronald Wolthoff
• Localización: International economic review, ISSN-e 1468-2354, Vol. 55, Nº. 3, 2014, págs. 839-867
• Idioma: inglés
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• Resumen

  • Empirical evidence suggests that transitions between employment states are highly clustered around the first day of each workweek or month. I analyze the effect of this phenomenon by presenting an equilibrium search model in which the period length is a parameter determining the degree of clustering. Infinitesimally short periods result in a continuous-time model with bilateral meetings, whereas longer time periods introduce the possibility of recall or simultaneity of job offers. In this environment, I show that the period length has a profound effect on equilibrium outcomes, including the unemployment rate, unemployment duration, and the cross-sectional wage distribution.