Cover -- Contents -- 1 Introduction -- 2 Empirical Evidence on Emerging Economy Labor Markets -- 3 A Small Open Economy Model with Search-Matching Frictions -- 4 Quantitative Analysis -- 4.1 Calibration -- 4.2 Solution: Nonlinear Methods -- 4.3 The Model Dynamics -- 4.4 Main Findings -- Canonical SOE-RBC -- Search-Matching Model -- 4.5 Sensitivity Analysis -- 5 Matching efficiency shocks -- 6 Conclusion -- Tables -- Table 1: Real earnings -- Table 2: Unemployment Rate and Employment -- Table 3: Hours worked: Manufacturing and Aggregate -- Table 4: Calibrated Parameters -- Table 5: Business Cycle Moments -- Table 6: Sensitivity Analysis -- Table 7: Matching Efficiency Shocks -- Figures -- Figure 1: Sectoral Decomposition of Employment -- Figure 2: Limiting Distributions of Endogenous State Variables -- Figure 3: Impulse Response Functions: Main Macroeconomic Variables -- Figure 4: Impulse Response Functions: Labor Market Variables -- Appendixes -- A: Data Appendix -- B: TFP computation -- C: Decentralized Economy -- D: Canonical SOE-RBC -- References -- References.