Labour economics
Answer the following question. Question 1
Are the statements in the paragraph below correct or incorrect? Explain. The answer must include one mathematical expression, and not more than one.
“Consider the Burdett-Mortensen model of on-the-job search studied in lectures. If the assumption of on-the-job search is removed, then it is not possible to write a correct equal profits condition.
As a result, the equilibrium wage distribution would be very different, although it may still have a range of wages in its support”.
Consider the Burdett-Mortensen model of on-the-job search studied in lectures and if the assumption of on-the-job search is removed, then it is not possible to write a correct equal profits condition.
