Work Hour Mismatch and On-the-job Search

This paper explores an on-the-job search model with wage bargaining and mismatch. It considers two types of jobs and workers, and the instantaneous value of the job-worker match depends on their type. The most important assumption is that while the job type is …xed throughout its life, the worker type changes in accordance with a stochastic process. This paper shows that although the workers’turnover decision is privately efficient, this decision may be socially ine¢ cient because of the hold-up problem.