Testing for optimality in job search models

  title={Testing for optimality in job search models},
  author={Gary Koop and Dale J. Poirier},
Models of search in labor markets are potentially of great use for policy analy-sis since their parameters are structural. However, a common feature of these models is that an assumption of optimal behavior on the part of agents is necessary to achieve identifica-tion. From a classical econometric perspective, this means the assumption of optimality is untestable and, if optimality is not imposed, it is impossible to learn about the unidentified parameters. This paper argues that Bayesian… CONTINUE READING


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