Thesis defence Essays on Information Frictions in Labor Markets: Search and Matching Model Perspective Add to calendar 2025-06-09 14:00 2025-06-09 16:00 Europe/Rome Essays on Information Frictions in Labor Markets: Search and Matching Model Perspective Seminar Room B Villa La Fonte YYYY-MM-DD Print Share: Share on Facebook Share on BlueSky Share on X Share on LinkedIn Send by email Scheduled dates Jun 09 2025 14:00 - 16:00 CEST Seminar Room B, Villa La Fonte Organised by Department of Economics PhD thesis defence by Mimani Pranav This thesis is composed of 3 chapters that discuss the role of information frictions in labour market dynamics. A standard model of frictional market of Mortensen-Pissarides search and matching, works on the assumption that the underlying productivity process for generating output is known to workers and firms alike. The implications that workers should not make systematic errors about their perception of labour market outcomes, however, have been challenged by recent survey evidence. In the thesis, the information frictions are based on the ‘Stubborn Beliefs Equilibrium’ of Menzio [2022] where a subset of workers believe that productivity is constant at the long run average. The chapters together analyse firms’ responses when faced with workers that are unaware of the productivity processes. In Chapter 1, I model homogeneous firms that generate output when matched with a worker. The output is driven by an aggregate productivity process that replicates the US business cycles. The framework of information frictions is validated using Simulated Method of Moments to match the volatility of vacancy creation and job finding rate time series at the quarterly level. The framework replicates features of the data for reasonable calibration of the parameters and consequently provides an alternate resolution to the ‘Unemployment Volatility Puzzle’. In chapter 2, I expand the analysis of chapter 1 by modeling endogenous job destruction. During periods of low aggregate productivity, the firm chooses to separate from workers that have information frictions due to fixed wage contract. With endogenous separation, the proportion of workers with information friction in the unemployment pool increases during low productivity periods which further impacts vacancy creation. In chapter 3, I introduce the notion of heterogeneous firms with the output being a product of aggregate productivity and firm specific productivity. In a partial equilibrium setup, firms with low productivity prefer to hire workers without information friction, while high productivity firms prefer the workers with information frictions. Firms with larger share of uninformed workers become more exposed to large shocks while the firms with higher share of informed workers exhibit reduced risk of worker layoffs. Register