Directed Search On the Job and the Wage Ladder ∗

  title={Directed Search On the Job and the Wage Ladder ∗},
  author={Alain Delacroix and Shouyong Shi},
In this paper we characterize the equilibrium in a labor market where employed workers search on the job and firms direct the search by announcing wages and employment probabilities for the applicants. All workers/jobs are homogeneous and free entry of firms determines the number of jobs. The equilibrium features a wage ladder, with a finite number of rungs. Workers on each particular rung of the ladder choose (optimally) to apply to only the jobs at one level above their current wage, despite… CONTINUE READING

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