LABOR MARKET SEARCH: AN EXPERIMENTAL STUDY

The theoretical results derived from models of economic search have implications which relate to the structure and performance of labor markets. Utilizing a series of laboratory experiments, we attempt to capture many of the features of workers' search and also the conditions under which labor markets operate. By varying certain of the experimental conditions, we are able to determine the searchers' responses to changes in the terms of unemployment insurance, to the existence of a minimum wage, and to different states of information about the underlying distribution of wages. In most cases the behavior of the searchers is consistent with that predicted by theory.