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Maxime Liégey
 
''Search externalities and management policies''
( 2021, Vol. 41 No.4 )
 
 
How can externalities in the labor market interact with firms' adoption of Human Resource Management (HRM) policies ? I build a search-and-matching model in which managers supervise teams of workers and intervene in the output process, in order to account for the equilibrium determination of managers' choice between labor-hoarding versus labor-churning HRM policies. I show that, if congestion externalities on workers' side are strong enough, they are willing to accept moderate wages provided the job-finding rate is high enough. This induces managers to adopt labor-hoarding HRM policies, which fosters manager entry into the market. The model thus establishes a testable result, namely, a positive relationship between the strength of congestion externalities on workers' side, and firms' propensity to adopt labor-hoarding HRM policies.
 
 
Keywords: Search-and-Matching, Human Resource Management Policies, Worker Turnover
JEL: J6 - Mobility, Unemployment, and Vacancies: General
L2 - Firm Objectives, Organization, and Behavior: General
 
Manuscript Received : Dec 29 2021 Manuscript Accepted : Dec 29 2021

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