Creator: Kahn, Charles M. Series: Working paper (Federal Reserve Bank of Minneapolis. Research Department) Number: 266 Abstract:
In this article we use the techniques developed in examining optimal contracting with imperfect information to build a simple equilibrium model of a labor market with imperfect information. We then use the model to examine the effects that imperfect information imposes on labor markets, particularly when compared with full information and noncontractual base lines. We demonstrate that quits increase in periods of high output, without postulating exogenous price rigidity.
Keyword: Spot markets, Job search, Information, Job change, Quitter, and Employment Subject (JEL): D80 - Information, Knowledge, and Uncertainty: General and J24 - Human Capital; Skills; Occupational Choice; Labor Productivity