In the two-sided search model, an unemployed worker's chances of finding a job depend on
A)opportunities in other countries.
B)his or her search effort.
C)the reservation wage.
D)labour market tightness.
E)employment insurance benefits.

Question

Quizplus · Accepted Answer

Labour market tightness refers to the ratio of job vacancies to unemployment, and it determines the competition between job seekers for available job openings. In the two-sided search model, the lower the labour market tightness, the higher the likelihood of a worker finding a job in a given period. Therefore, labour market tightness is a crucial factor affecting the chances of an unemployed worker finding a job.

In the Two-Sided Search Model, an Unemployed Worker's Chances of Finding