Download or read book Frictional Wage Dispersion in Search Models written by Andreas Hornstein and published by . This book was released on 2007 with total page 56 pages. Available in PDF, EPUB and Kindle. Book excerpt: Standard search and matching models of equilibrium unemployment, once properly calibrated, can generate only a small amount of frictional wage dispersion, i.e., wage differentials among ex-ante similar workers induced purely by search frictions. We derive this result for a specific measure of wage dispersion -- the ratio between the average wage and the lowest (reservation) wage paid. We show that in a large class of search and matching models this statistic (the "mean-min ratio") can be obtained in closed form as a function of observable variables (i.e., the interest rate, the value of leisure, and statistics of labor market turnover). Various independent data sources suggest that actual residual wage dispersion (i.e., inequality among observationally similar workers) exceeds the model's prediction by a factor of 20. We discuss three extensions of the model (risk aversion, volatile wages during employment, and on-the-job search) and find that, in their simplest versions, they can improve its performance, but only modestly. We conclude that either frictions account for a tiny fraction of residual wage dispersion, or the standard model needs to be augmented to confront the data. In particular, the last generation of models with on-the-job search appears promising.

Download or read book Instruction f r die Accise mter die Reform des Accise Wesens den Blasenzins und die Erhebung der Land Consumtions Steuer betr written by and published by . This book was released on 1810 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Frictional Wage Dispersion in Search Models written by Andreas Hornstein and published by . This book was released on 2006 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Unemployment History and Frictional Wage Dispersion in Search Models of the Labor Market written by Victor Ortego Marti and published by . This book was released on 2012 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis studies the inability of search models to match both observed labor market flows and the empirical wage distribution. I show that a known feature of the labor market, that unemployment hurts workers' wages, has an important effect on workers' search behavior, and explains why we observe that similar workers are paid different wages. The first chapter reviews the relevant literature. I begin by describing the findings in Hornstein, Krusell and Violante (2011) that baseline search models struggle to generate significant wage dispersion, the so-called frictional wage dispersion puzzle. Further, search models face a trade-off between matching the cross-sectional wage distribution and matching the cyclical volatility of unemployment and vacancies. The chapter reviews the unemployment volatility puzzle and explains this trade-off. Given that the thesis introduces the loss of human capital during unemployment, the chapter ends with a review of the related empirical literature. Chapter 2 studies wage dispersion among identical workers in a random matching search model in which workers lose human capital during unemployment. Wage dispersion increases, as workers accept lower wages to avoid long unemployment spells. I show that the model is an important improvement over baseline search models. The model with unemployment history explains between a third and half of the observed residual wage dispersion. In Chapter 3 I add on-the-job search to the model with unemployment history. Workers accept lower wages because they keep the option of searching for better paying jobs. Wage dispersion increases significantly. The model accounts for all of the residual wage dispersion. The model also generates substantial wage dispersion even for high values of non-market time. The chapter thus addresses the trade-off between explaining frictional wage dispersion and the cyclical behavior of unemployment.

Download or read book Fictional Wage Dispersion in Search Models written by and published by . This book was released on 2007 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Standard search and matching models of equilibrium unemployment, once properly calibrated, can generate only a small amount of frictional wage dispersion, i.e., wage differentials among ex-ante similar workers induced purely by search frictions. We derive this result for a specific measure of wage dispersion -- the ratio between the average wage and the lowest (reservation) wage paid. We show that in a large class of search and matching models this statistic (the "mean-min ratio") can be obtained in closed form as a function of observable variables (i.e., the interest rate, the value of leisure, and statistics of labor market turnover). Various independent data sources suggest that actual residual wage dispersion (i.e., inequality among observationally similar workers) exceeds the model's prediction by a factor of 20. We discuss three extensions of the model (risk aversion, volatile wages during employment, and on-the-job search) and find that, in their simplest versions, they can improve its performance, but only modestly. We conclude that either frictions account for a tiny fraction of residual wage dispersion, or the standard model needs to be augmented to confront the data. In particular, the last generation of models with on-the-job search appears promising.

Download or read book Sufficient Statistics for Frictional Wage Dispersion and Growth written by Rune Majlund Vejlin and published by . This book was released on 2019 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper develops a sufficient statistics approach for estimating the role of search frictions in wage dispersion and lifecycle wage growth. We show how the wage dynamics of displaced workers are directly informative of both for a large class of search models. Specifically, the correlation between pre- and post-displacement wages is informative of frictional wage dispersion. Furthermore, the fraction of displaced workers who suffer a wage loss is informative of frictional wage growth, independent of the job-offer distribution. Applying our methodology to US data, we find that search frictions account for less than 20 percent of wage dispersion. In addition, we estimate an employed job-offer to job-destruction ratio less than one, implying little frictional wage growth. We finish by estimating two versions of a random search model to show how at least two different mechanisms - involuntary job transitions or compensating differentials - can reconcile our results with the job-to-job mobility seen in the data. Regardless of the mechanism, the estimated models show that frictional wage growth accounts for about 15% of lifecycle wage growth.

Download or read book Exploring the Causes of Frictional Wage Dispersion written by Volker Tjaden and published by . This book was released on 2012 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Endogenous On the job Search and Frictional Wage Dispersion written by Matthias S. Hertweck and published by . This book was released on 2010 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper addresses the large degree of frictional wage dispersion in US data. The standard job matching model without on-the-job search cannot replicate this pattern. With on-the-job search, however, unemployed job searchers are more willing to accept low wage offers since they can continue to seek for better employment opportunities. This explains why observably identical workers may be paid very differently. Therefore, we examine the quantitative implications of on-the-job search in a stochastic job matching model. Our key result is that the inclusion of variable on-the-job search increases the degree of frictional wage dispersion by an order of a magnitude.

Download or read book Wage Dispersion and Equilibrium Search Models written by Giovanni Sulis and published by . This book was released on 2008 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper provides a structural estimation of an equilibrium search model with on-the-job search and heterogeneity in firms' productivities using a sample of Italian male workers. Results indicate that arrival rates of offers for workers are higher when unemployed than when employed and firms exploit their monopsony power when setting wages. As a result, workers earn far less than their marginal product. The model is then used to study regional labour market differentials in Italy. Wide variation in frictional transition parameters across areas helps to explain persistent unemployment and wage differentials.

Download or read book Wage Dispersion written by Dale Mortensen and published by MIT Press. This book was released on 2003 with total page 170 pages. Available in PDF, EPUB and Kindle. Book excerpt: A theoretical and empirical examination of wage differentials findsthat traditional theories of competition do not explain why workers with identical skills are paid differently.

Download or read book Frictional Wage Dispersion in the U S written by Rahel Felder and published by . This book was released on 2011 with total page 46 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Wage Dispersion Job Vacancies Job Search and Frictional Unemployment Their Simultaneous Nature written by B. Curtis Eaton and published by . This book was released on 1975 with total page 31 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Job Matching Wage Dispersion and Unemployment written by Dale T. Mortensen and published by Oxford University Press, USA. This book was released on 2011-04-28 with total page 219 pages. Available in PDF, EPUB and Kindle. Book excerpt: A selection of key papers from the winners of the Nobel Memorial Prize 2010. It features their most important work on unemployment, labour market dynamics, and the equilibrium search model.

Download or read book Equilibrium Wage Distributions written by Joseph E. Stiglitz and published by . This book was released on 1984 with total page 64 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper analyzes equilibrium in labor markets with costly search. Even in steady state equilibrium, identical labor may receive different wages; this may be the case even when the only source of imperfect information is the inequality of wages which the market is perpetuating. When there are information imperfections arising from (symmetric)differences in non-pecuniary characteristics of jobs and preferences of individuals, there will not in general exist a full employment, zero profit single wage equilibrium. There are, in general, a multiplicity of equilbria. Equilibrium may be characterized by unemployment; in spite of the presence of an excess supply of labor, no firm is willing to hire workers at a lowerwage. It knows that if it does so, the quit rate will be higher, and hence turnover costs(training costs) will be higher, so much so that profits will actually be lower. The model thus provides a rationale for real wage rigidity. The model also provides a theory of equilibrium frictional unemployment. Though the constrained optimality (taking explicitly into account the costs associated with obtaining information and search) may entail unemployment and wage dispersion, the levels of unemployment and wage dispersion in the market equilibrium will not, in general, be (constrained) optimal.

Download or read book Job Search Human Capital and Wage Inequality written by Carlos Carrillo-Tudela and published by . This book was released on 2012 with total page 43 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Wage Dispersion Job Vacancies Job Search and Frictional Unemployment Their Simultaneous Nature written by B. Curtis Eaton and published by . This book was released on 1975 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Alternative Models of Wage Dispersion written by Damien Gaumont and published by International Monetary Fund. This book was released on 2005 with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt: We analyze labor market models where the law of one price does not hold-that is, models with equilibrium wage dispersion. We begin by assuming workers are ex ante heterogeneous, and highlight a flaw with this approach: if search is costly, the market shuts down. We then assume workers are homogeneous, but matches are ex post heterogeneous. This model is robust to search costs, and it delivers equilibrium wage dispersion. However, we prove the law of two prices holds: generically, we cannot get more than two wages. We explore several other models, including one combining ex ante and ex post heterogeneity, which is robust and can deliver more than two-point wage distributions.