The standard search model predicts that the hazard and the expected accepted wage should be constant over an unemployment spell. This note shows that heterogeneity in job o®er arrival rates can generate declining hazards and declining accepted wages, results in conformity with the empirical evidence. In addition, two testable implications are derived. The first is a relationship between the rate of change of the aggregate hazard over time and the variance of the hazard; and the second between the rate of change over time of the expected accepted wage and the covariance between the expected accepted wage and the hazard.
|Status||Published - 2001|