Working Papers present research work by both Danmarks Nationalbank’s employees and our partners. Working Papers are primarily targeted at professionals and people with an interest in central banking research as well as economics and finance in a broader sense.
On-the-Job Search and Inflation Under the Microscope
We develop a model where heterogeneous agents choose whether to engage in on-the-job search (OJS) to improve labor income. The model accounts for microdata patterns: fiscal incentives affect job-to-job mobility and wage growth of stayers - but not leavers-across the income distribution, pointing to OJS as a key driver of labor costs.