Job security, stability, and production efficiency. (English) Zbl 1396.91366

Fu, Hu; Kleinberg, Robert D.; Lavi, Ron; Smorodinsky, Rann

Theor. Econ. 12, No. 1, 1-24 (2017).

Summary: We study a two-sided matching market with a set of heterogeneous firms and workers in an environment where jobs are secured by regulation. Without job security Kelso and Crawford have shown that stable outcomes and efficiency prevail when all workers are gross substitutes to each firm. It turns out that by introducing job security, stability and efficiency may still prevail, and even for a significantly broader class of production functions.

MSC:

91B40	Labor market, contracts (MSC2010)
91B68	Matching models

Keywords:

matching; stability; labor market; job security; efficiency