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He puts together a nifty chart that shows a very tight match between moves in the Wilshire stock index and in an index of job value.
An employer offers a higher job value to increase firm size in the steady state.
The positive correlation between job value and firm size occurs for two reasons, as described in Bontemps et al. (1999).
As the job value for women declines, women with a higher reservation utility prefer to remain unemployed rather than work in these types of jobs.
Second, a higher job value attracts currently employed workers, which prevents them from taking another job; this phenomenon is called the Burdett and Mortensen (1998) channel.
This phenomenon is known as the Albrecht and Axell (1984) mechanism, in which workers are heterogeneous in their reservation utilities; as a result, a greater number of workers will prefer employment to unemployment when a higher job value is offered.
Similar(51)
As Mr Hall says:[E]vents that trigger a rise in fi nancial discounts, such as a fi nancial crisis, will lower job values substantially, causing a corresponding increase in unemployment and decline in output.
Let G g be the distribution of job values for employed workers.
The topic single machine scheduling with deteriorating job values has been extensively researched.
The distribution of job values is given by functions F m for men and F f for women.
Given the distributions of S 0 and H 0, I derive the distributions of the job values F g (v g ) and the fraction of men working in jobs θ 1.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com