TY - RPRT AU - Dolado, Juan J. AU - Jansen, Marcel AU - Jimeno, Juan F. TI - On-the-Job Search in a Matching Model with Heterogenous Jobs and Workers PY - 2003/Oct/ PB - Institute of Labor Economics (IZA) CY - Bonn T2 - IZA Discussion Paper IS - 886 UR - https://www.iza.org/index.php/publications/dp886 AB - This paper considers a matching model with heterogenous jobs (unskilled and skilled) and workers (low and high-educated) which allows for on-the-job search by mismatched workers. The latter are high-educated workers who transitorily accept unskilled jobs and continue to search for skilled jobs. Our findings show that on-the-job search introduces an additional source of between and within-group wage inequality. Furthermore, the higher quit rate of mismatched workers exerts a negative externality on unskilled jobs and weakens the labour market position of low-educated workers. This last feature changes the effects of skill-biased technological change and it alters the response of the labour market to shifts in the skill distribution. KW - skills KW - job search KW - wage inequality KW - unemployment ER -