Preliminary

This paper develops a dynamic general equilibrium matching model with many types of workers, many types of jobs and many possible ag-gregate productivity states. Wages are determined by labor auctions and workers can continue to search on-the-job for better employment opportunities. The model is solved using two systems of linear equa-tions- the \u85rst gives a solution for wages given a vacancy creation rule and the second uses the solution of the \u85rst to solve for equilibrium va-cancies. Consequently, the numerical calculation of the decentralized equilibrium is both accurate and fast. The model is evaluated quanti-tatively using micro data on wages and worker productivity and macro data on vacancies and unemployment.