@article{adf9e2407c3a443192046facdda4da6f,
title = "Directed search over the life cycle",
abstract = "We develop a life-cycle model of the labor market in which different worker-firm matches have different quality and the assignment of the right workers to the right firms is time consuming because of search and learning frictions. The rate at which workers move between unemployment, employment and across different firms is endogenous because search is directed and, hence, workers can choose whether to seek low-wage jobs that are easy to find or high-wage jobs that are hard to find. We calibrate our theory using data on labor market transitions aggregated across workers of different ages. We validate our theory by showing that it predicts quite well the pattern of labor market transitions for workers of different ages. Finally, we use our theory to decompose the age profiles of transition rates, wages and productivity into the effects of age variation in work-life expectancy, human capital and match quality.",
keywords = "Directed search, Labor reallocation, Lifecycle",
author = "Guido Menzio and Telyukova, {Irina A.} and Ludo Visschers",
note = "Funding Information: We have benefited from the insights of three anonymous referees, Pierre Cahuc, Jean-Olivier Hairault, Florian Hoffmann, Greg Kaplan, John Kennan, Richard Rogerson, Henry Siu and Randy Wright. We have also received useful comments from participants at the macro seminar at UC Santa Cruz, Mainz, Freiburg, Konstanz, Bogazici, METU, Carlos III, Royal Holloway, Edinburgh, the Essex conference in honor of Ken Burdett (Essex 2010), the NBER Summer Institute (Cambridge 2010), the Canadian Macro Study Group (London 2010), the Society for Economic Dynamics Meeting (Montreal 2010), the Royal Economic Society Meeting (London 2010), the workshop on Labor Market Transitions over the Lifecycle (Paris 2011). Visschers acknowledges financial support from the Simon Fraser University{\textquoteright}s President{\textquoteright}s Research Grant, the Spanish Ministry of Science and Innovation grant ECO2010/20614, the Bank of Spain{\textquoteright}s Programa de Excelencia Grant, and the Juan de la Cierva Grant. Funding Information: We have benefited from the insights of three anonymous referees, Pierre Cahuc, Jean-Olivier Hairault, Florian Hoffmann, Greg Kaplan, John Kennan, Richard Rogerson, Henry Siu and Randy Wright. We have also received useful comments from participants at the macro seminar at UC Santa Cruz, Mainz, Freiburg, Konstanz, Bogazici, METU, Carlos III, Royal Holloway, Edinburgh, the Essex conference in honor of Ken Burdett (Essex 2010), the NBER Summer Institute (Cambridge 2010), the Canadian Macro Study Group (London 2010), the Society for Economic Dynamics Meeting (Montreal 2010), the Royal Economic Society Meeting (London 2010), the workshop on Labor Market Transitions over the Lifecycle (Paris 2011). Visschers acknowledges financial support from the Simon Fraser University's President's Research Grant, the Spanish Ministry of Science and Innovation grant ECO2010/20614 , the Bank of Spain's Programa de Excelencia Grant, and the Juan de la Cierva Grant. Publisher Copyright: {\textcopyright} 2015 Elsevier Inc.",
year = "2016",
month = jan,
day = "1",
doi = "10.1016/j.red.2015.03.002",
language = "English (US)",
volume = "19",
pages = "38--62",
journal = "Review of Economic Dynamics",
issn = "1094-2025",
publisher = "Academic Press Inc.",
}