On the job search and working capital

19 May 2016

We study the steady-state effects of working capital channel on the distribution of wages and reallocation of workers across employers. We first show that in a simple Burdett-Mortensen on-the-job search model, working capital channel matter for wage offers distributions of firms and wage distribution of workers. Both wage offer and wage distributions with working capital channel operating are stochastically dominated by distributions without this channel. We also show how working capital channel affects firm size, cross-firms flows of workers and firms’ poaching behavior.

keywords: job search, unemployment, financial market
JEL codes: 
publication year: 2016
language: english
Publications category:  ,
publishing series: IBS Working Paper
publication number: 06/2016
ISSN: 2451-4373
Additional information:

This research was financed by the Polish National Science Centre grant following decision number: DEC-2011/03/B/HS4/05895.

Projects related to this publication:

National Bank of Poland

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