This article proposes a matching model of the labor market in the presence of uncertainty and learning about ability that provides a simple unified framework for analyzing the dynamics of jobs and wages within firms and in the labor market. The model allows for different degrees of generality of ability as well as speeds of learning across jobs and firms. Equilibrium assignments and wages are consistent with a broad range of empirical findings on careers, suggest a novel interpretation for well-documented patterns, and help explain features of careers usually thought difficult to reconcile with the presence of uncertainty and learning.
Bibliographical notePublisher Copyright:
© (2015) by the Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.
- Careers in firms
- Job Assignment