For the first seminar: JOB …

For the first seminar:JOB SEARCH

Show that the optimal reservation wage in the basic model (equation 6 in Ch. 3:1.1.1) is the one that maximizes Vu.

Calculate the expressions of the comparative statics of the basic model that are discussed on p. 113 of the book and discuss the signs.

Discuss the relationship between the reservation wage and the matching technology.

Does the surplus from employment (Ve – Vu) vary with the matching technology?

Discuss is the relationship between search effort and the matching function.

Explain why a rise in the unemployment benefit level reduces the reservation wage for non-eligible job seekers (C. 3: 1.2.1).

Consider the model of on-the-job search (3: 1.2.2). Discuss how the reservation wage depends on the arrival rates of job offers in different states.