  In this paper we apply the techniques of symbolic dynamics to the analysis of
a labor market which shows large volatility in employment flows. In a recent
paper, Bhattacharya and Bunzel \cite{BB} have found that the discrete time
version of the Pissarides-Mortensen matching model can easily lead to chaotic
dynamics under standard sets of parameter values. To conclude about the
existence of chaotic dynamics in the numerical examples presented in the paper,
the Li-Yorke theorem or the Mitra sufficient condition were applied which seems
questionable because they may lead to misleading conclusions. Moreover, in a
more recent version of the paper, Bhattacharya and Bunzel \cite{BB1} present
new results in which chaos is completely removed from the dynamics of the
model. Our paper explores the matching model so interestingly developed by the
authors with the following objectives in mind: (i) to show that chaotic
dynamics may still be present in the model for standard parameter values; (ii)
to clarify some open questions raised by the authors in \cite{BB}, by providing
a rigorous proof of the existence of chaotic dynamics in the model through the
computation of topological entropy in a symbolic dynamics setting.
