The Theory of Search in Labour Markets

Abstract

This chapter studies the main results of the theory of search in labour markets. Since most work in the literature is concerned with job search by workers, this will also be our main concern. Perhaps because of the technical difficulties involved in formulating models of job search, all but the most elementary ideas associated with the approach are omitted from undergraduate labour-economics textbooks. This is a pity, since job-search models have proved a useful vehicle for the study of a variety of problems and, once the veneer of theoretical abstraction has been penetrated, the results are readily explained.