Equilibrium search models revolutionize labor market policy analysis and understanding.
The article explores how equilibrium search models can help us understand labor markets better. By analyzing real data on wages and job durations, researchers have made significant progress in explaining how these markets work. This approach not only helps policymakers make better decisions but also sheds light on some puzzling facts about the job market. The study concludes that using this method with worker-firm data can be very useful for understanding how the labor market functions.