@TechReport{iza:izadps:dp968,
            	author={Cuesta, Maite Blázquez and Jansen, Marcel},
            	title={Efficiency in a Matching Model with Heterogeneous Agents: Too Many Good or Bad Jobs?},
            	year={2003},
	month={Dec},
            	institution={Institute of Labor Economics (IZA)},
            	address={Bonn},
            	type={IZA Discussion Paper},
            	number={968},
            	url={https://www.iza.org/publications/dp968},
	abstract={This paper analyses the efficiency of the equilibrium allocation in a matching model with two
types of workers and jobs. The basic assumption is that high-skill workers can perform both
skilled and unskilled jobs, while low-skill workers can only perform unskilled jobs. Our first
result shows that the equilibrium with ex-post bargaining is never efficient. Second, under
Hosios’ (1990) condition we show that high-skill workers are under-valued in equilibrium,
while the opposite holds for low-skill workers. Firms therefore tend to create too few unskilled
jobs, resulting in a suboptimally high unemployment rate for low-skill workers. We show that
these results generalize to environments with more types of agents and different production
technologies. Finally, in an extension we derive a tax scheme that restores efficiency and we
show how workers’ bargaining strength affects unemployment and skill-mismatch.},
	keywords={heterogeneity;ex post bargaining;matching;efficiency},
            }