| Article ID: | iaor201111969 |
| Volume: | 44 |
| Issue: | 2 |
| Start Page Number: | 709 |
| End Page Number: | 717 |
| Publication Date: | May 2011 |
| Journal: | Canadian Journal of Economics/Revue canadienne d'conomique |
| Authors: | Hahm Sang-Moon, Mayer Katarina |
| Keywords: | modelling, unemployment |
In this paper, we study a model that incorporates costly job search into an efficiency wage model. We show that the relationship between wages and detection rates is ambiguous in this framework. The model can generate a positive relationship, consistent with empirically reasonable values for unemployment rates, job finding rates, and employment duration.