Labour Market Flows with Heterogeneity

An investigation of labour market flows in a search and matching setting with public and private sectors, capital-skill complementarity and embodied technological progress, and heterogeneity of both households and workers. We assume a skill gap in this model to analyse changes in labour flows due to productivity increases and public wage premium. Further, we plan to model on-the-job search a la Moreno-Glabis and Sneessens (2007) between simple and complex jobs (for skilled individuals) and between public and private sector jobs (for all individuals). The heterogeneity between public and private sectors follows the framework by Gomes (2018).