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 Frictional Wage Dispersion in Search Models written by Andreas Hornstein and published by . This book was released on 2006 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: "Standard search and matching models of equilibrium unemployment, once prop- erly calibrated, can generate only a small amount of frictional wage dispersion, i.e., wage di erentials among ex-ante similar workers induced purely by search frictions. We derive this result for a speci c 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., interest rate, value of leisure, and statistics of labor market turnover). Looking at various independent data sources suggests that, empirically, 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 nd that, in their simplest version, 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."--Federal Reserve Bank of Richmond web site.

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 Job Matching Wage Dispersion and Unemployment written by Dale T. Mortensen and published by IZA Prize in Labor Economics. This book was released on 2016-06-16 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Dale T. Mortensen and Christopher A. Pissarides are the recipients (with Peter Diamond) of the Nobel memorial Prize in Economics 2010. They have made path-breaking contributions to the analysis of markets with search and matching frictions, which account for much of the success of job searchtheory and the flows approach in becoming a leading tool for microeconomic and macroeconomic analysis of labor markets. Both scientists have gained groundbreaking insights through individual as well as joint research. Consequently, this volume not only features several papers which helped shape theequilibrium search model, including some early contributions which have initiated the research on what is known today as the search and matching model of the labor market, but it also presents a joint paper by the IZA Prize Laureates, which is a complete statement of the equilibrium search andmatching model with endogenous job creation and job destruction.As part of the IZA Prize Series, the book presents a selection of their most important work which has highly enriched research on unemployment as an equilibrium phenomenon, on labor market dynamics, and on cyclical adjustment.

Download or read book Unemployment Choice and Inequality written by Michael Sattinger and published by Springer. This book was released on 1985-06 with total page 198 pages. Available in PDF, EPUB and Kindle. Book excerpt: This monograph began as a study of the consequences of labor force effects, in cluding unemployment, for the distribution of earnings. I began by developing a model of job search. But following my previous work on the distribution of earnings, the search theory took a different form from the standard literature. Workers and firms were engaged in mutual search which effectively assigned workers to jobs. A number of open questions immediately became apparent, including the relation bet ween unemployment and inequality, the nature and costs of unemployment, and the role of choice. These quickly provided sufficient material for the monograph. I began work on the project in 1980 at Miami University of Ohio. I wish to thank my chairman there, William McKinstry, for the support I received during my last year there. My colleagues Donald Cymrot and James Moser provided some early com ments on the project and I am indebted to Joseph Simpson for extensive computer assistance.

Download or read book Equilibrium Unemployment Theory second edition written by Christopher A. Pissarides and published by MIT Press. This book was released on 2000-03-02 with total page 273 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book focuses on the modeling of the transitions in and out of unemployment, given the stochastic processes that break up jobs and lead to the formation of new jobs, and on the implications of this approach for macroeconomic equilibrium and for the efficiency of the labor market. An equilibrium theory of unemployment assumes that firms and workers maximize their payoffs under rational expectations and that wages are determined to exploit the private gains from trade. This book focuses on the modeling of the transitions in and out of unemployment, given the stochastic processes that break up jobs and lead to the formation of new jobs, and on the implications of this approach for macroeconomic equilibrium and for the efficiency of the labor market. This approach to labor market equilibrium and unemployment has been successful in explaining the determinants of the "natural" rate of unemployment and new data on job and worker flows, in modeling the labor market in equilibrium business cycle and growth models, and in analyzing welfare policy. The second edition contains two new chapters, one on endogenous job destruction and one on search on the job and job-to-job quitting. The rest of the book has been extensively rewritten and, in several cases, simplified.

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 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 Labor Market Segmentation Wage Dispersion and Unemployment written by Kevin Lang and published by . This book was released on 1992 with total page 31 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper briefly reviews the empirical evidence on labor market segmentation and presents some new results on the similarity of the pattern of segmentation across 66 different countries. The paper goes on to consider how unemployment might be understood in a labor market segmentation framework. Existing models of unemployment in a dual labor market suggest that unemployment should be concentrated among those who are ultimately employed in high wage jobs. In fact, unemployment seems to be concentrated among workers who are more likely to be found in low wage jobs. This happens even though at least some workers find low wage jobs easy to obtain, We develop a segmented labor market model capable of explaining these facts and then explore its implications for the aggregate unemployment rate. We find that it fits well with the facts.

Download or read book Advances in the Theory and Measurement of Unemployment written by Yoram Weiss and published by Springer. This book was released on 1989-06-18 with total page 350 pages. Available in PDF, EPUB and Kindle. Book excerpt: A collection of papers which analyzes and measures unemployment as a search activity, discusses efficiency wage models and which considers the impact of government and unions on employment and unemployment.

Download or read book An Evaluation of Unemployment Data Needs in Macro Models written by Jeffrey M. Perloff and published by . This book was released on 1978 with total page 98 pages. Available in PDF, EPUB and Kindle. Book excerpt:

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 Measuring the Equilibrium Effects of Unemployment Benefits Dispersion written by Aico van Vuuren and published by . This book was released on 2000 with total page 60 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 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 The Phillips Curve and Labor Markets written by Karl Brunner and published by North-Holland. This book was released on 1976 with total page 186 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on Frictional Labor Market written by Eunbi Ko and published by . This book was released on 2019 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation develops two models of frictional labor market which provide tools to understand some important phenomena of the US labor market.The first chapter models labor market choices of workers depending primarily on his/her marital status and the partner's labor market outcome if the worker is married. In the household of a married couple, an increase in the husband's wage leads to a rise in the number of days his wife remains out of the labor force. If only one of the couple is employed, a wage increase for the employed partner lengthens the spouse's unemployment duration. Moreover, if both are employed, their wages move in the same direction. To explain these stylized facts, I construct an equilibrium model of the labor market in which a married couple jointly chooses market participation and search for and separation from a job. Calibration shows that the model can correctly account for the facts. The unified framework with endogenous market participation and frictional search is necessary to correctly predict the correlations in spouses' labor market outcomes. Using the benchmark model, I do the policy experiments of unemployment insurance (UI) and the earned income tax credit (EITC). I show that generous UI can increase the employment-population ratio by mitigating married females' disincentive to participate in the market. I also show that the EITC increases the employment of single parents but it decreases the employment of workers who belong to other types of households. In the sense of welfare, the EITC enhances welfare for all single parents, but it reduces welfare of some married parents by reducing the value of working wives.In the second chapter, I construct a directed search model of the labor market with two types of workers and two types of firms to show that an asymmetric positive productivity shock could cause a recent upward shift of the US Beveridge curve. The model possesses an equilibrium in which unskilled workers apply to both high-tech and low-tech firms and skilled workers apply only to high-tech firms. The productivity difference between sectors affects unskilled workers' application strategy: the larger the productivity gap is, the more unskilled workers apply to high-tech firms. The calibration suggests that the productivity difference between sectors has become greater after the recession than before. This makes unskilled workers apply to a high-tech firm with a greater probability than before, which results in the lower average job-finding rate and an upward shift of the Beveridge curve.