The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Search Models of Unemployment

  • David Andolfatto
Reference work entry


Unemployment, as it is conventionally defined, is a measure of full-time job search. Individuals generally have the option of allocating their time across many competing uses. It follows that an economic interpretation of unemployment data requires a theory that explains the circumstances in which people may prefer to engage in job search at the expense of other activities. Search models of unemployment are designed to do just this.


Beveridge curve Business cycles Efficient allocation Involuntary unemployment Leisure Matching Matching markets Natural rate of unemployment Reservation wage Search models of unemployment Search theory Unemployment Unemployment insurance Wage determination 

JEL Classifications

D4 D10 
This is a preview of subscription content, log in to check access.


  1. Andolfatto, D. 1996. Business cycles and labor-market search. American Economic Review 86: 112–132.Google Scholar
  2. Andolfatto, D., and P. Gomme. 1996. Unemployment insurance and labor market activity in Canada. Carnegie-Rochester Conference Series on Public Policy 44: 47–82.CrossRefGoogle Scholar
  3. Blanchard, O., and P. Diamond. 1989. The Beveridge curve. Brookings Papers on Economic Activity 1: 1–60.CrossRefGoogle Scholar
  4. Blanchard, O., and J. Wolfers. 2000. The role of shocks and institutions in the rise of European unemployment. Economic Journal 110: 1–33.CrossRefGoogle Scholar
  5. Davis, S., and J. Haltiwanger. 1992. Gross job creation, gross job destruction, and employment reallocation. Quarterly Journal of Economics 107: 818–863.CrossRefGoogle Scholar
  6. Diamond, P. 1982. Wage determination and efficiency in search equilibrium. Review of Economic Studies 49: 217–227.CrossRefGoogle Scholar
  7. Hagedorn M, and Manovskii, I. 2005. The cyclical behavior of equilibrium unemployment and vacancies revisited. Working paper. University of Pennsylvania.Google Scholar
  8. Hall, R.E. 1995. Lost jobs. Brookings Papers on Economic Activity 1: 221–256.CrossRefGoogle Scholar
  9. Hall, R.E. 2005. Employment fluctuations with equilibrium wage stickiness. American Economic Review 95: 50–65.CrossRefGoogle Scholar
  10. Hopenhayn, H., and J.P. Nicolini. 1997. Optimal unemployment insurance. Journal of Political Economy 105: 412–438.CrossRefGoogle Scholar
  11. Hornstein, A., P. Krusell, and G. Violante. 2005. Unemployment and vacancy fluctuations in the matching model: Inspecting the mechanism. Federal Reserve Bank of Richmond Economic Quarterly 91: 19–51.Google Scholar
  12. Hosios, A.J. 1990. On the efficiency of matching and related models of search and unemployment. Review of Economic Studies 57: 79–98.CrossRefGoogle Scholar
  13. Howitt, P. 1988. Business cycles with costly search and recruiting. Quarterly Journal of Economics 103: 147–165.CrossRefGoogle Scholar
  14. Hussey, R. 1992. Nonparametric evidence on asymmetry in business cycles using aggregate employment time-series. Journal of Econometrics 51: 217–231.CrossRefGoogle Scholar
  15. Ljungqvist, L., and T. Sargent. 1998. The European unemployment dilemma. Journal of Political Economy 106: 514–550.CrossRefGoogle Scholar
  16. McCall, J.J. 1970. Economics of information and job search. Quarterly Journal of Economics 84: 113–126.CrossRefGoogle Scholar
  17. Merz, M. 1995. Search in the labor market and the real business cycle. Journal of Monetary Economics 36: 269–300.CrossRefGoogle Scholar
  18. Moen, E. 1997. Competitive search equilibrium. Journal of Political Economy 105: 385–411.CrossRefGoogle Scholar
  19. Mortensen, D.T. 1982. Property rights and efficiency in mating, racing, and related games. American Economic Review 72: 968–979.Google Scholar
  20. Mortensen, D.T. 2005. More on unemployment and vacancy fluctuations. Working paper. Northwestern University.Google Scholar
  21. Mortensen, D.T., and C. Pissarides. 1994. Job creation and job destruction in the theory of unemployment. Review of Economic Studies 61: 397–415.CrossRefGoogle Scholar
  22. Neftçi, S. 1984. Are economic time-series asymmetric over the cycle? Journal of Political Economy 92: 307–328.CrossRefGoogle Scholar
  23. Petrongolo, B., and C. Pissarides. 2001. Looking into the black box: A survey of the matching function. Journal of Economic Literature 39: 390–431.CrossRefGoogle Scholar
  24. Phelps, E.S. 1970. Microeconomic foundations of employment and inflation theory. New York: W.W. Norton.Google Scholar
  25. Pissarides. 1985. Short-run equilibrium dynamics of unemployment, vacancies, and real wages. American Economic Review 75: 676–690.Google Scholar
  26. Pissarides. 2000. Equilibrium unemployment theory. 2nd ed. Cambridge, MA: MIT Press.Google Scholar
  27. Rogerson, R. 1997. Theory ahead of language in the economics of unemployment. Journal of Economic Perspectives 11(1): 73–92.CrossRefGoogle Scholar
  28. Rogerson, R. 2001. The employment of nations: A primer. Federal Reserve Bank of Cleveland Economic Review 4: 27–50.Google Scholar
  29. Rogerson, R., R. Shimer, and R. Wright. 2005. Search-theoretic models of the labor market: A survey. Journal of Economic Literature 43: 959–988.CrossRefGoogle Scholar
  30. Sargent, T.J. 1987. Dynamic macroeconomic theory. Cambridge, MA: Harvard University Press.Google Scholar
  31. Shavell, S., and L. Weiss. 1979. The optimal payment of unemployment insurance benefits over time. Journal of Political Economy 87: 1347–1362.CrossRefGoogle Scholar
  32. Shimer, R. 2005a. Reassessing the ins and outs of unemployment. Working paper. University of Chicago.Google Scholar
  33. Shimer, R. 2005b. The cyclical behavior of equilibrium unemployment and vacancies. American Economic Review 95: 25–49.CrossRefGoogle Scholar
  34. Stigler, G.J. 1962. Information in the labor market. Journal of Political Economy 70: 94–105.CrossRefGoogle Scholar
  35. Wang, C., and S. Williamson. 1996. Unemployment insurance with moral hazard in a dynamic economy. Carnegie-Rochester Conference Series on Public Policy 44: 1–41.CrossRefGoogle Scholar

Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • David Andolfatto
    • 1
  1. 1.