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Abstract

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. Copyright 2008 The Author. Journal compilation 2008 CEIS, Fondazione Giacomo Brodolini and Blackwell Publishing Ltd..

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File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1467-9914.2008.00426.x
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Bibliographic Info

Article provided by CEIS in its journal LABOUR.

Volume (Year): 22 (2008)
Issue (Month): 4 (December)
Pages: 593-627

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Handle: RePEc:bla:labour:v:22:y:2008:i:4:p:593-627

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Find related papers by JEL classification:

• J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
• C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
• J64 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment: Models, Duration, Incidence, and Job Search
• C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
• D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
• C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Longitudinal Data; Spatial Time Series
• J - Labor and Demographic Economics

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Cited by:

1. Ceyhun ELGİN & Tolga Umut KUZUBAŞ, 2012. "Wage-Productivity Gap in Turkish Manufacturing Sector," Iktisat Isletme ve Finans, Bilgesel Yayincilik, vol. 27(316), pages 09-31.
   
   • Ceyhun Elgin & Tolga Umut Kuzubas, 2012. "Wage-Productivity Gap in Turkish Manufacturing Sector," Working Papers 2012/03, Bogazici University, Department of Economics.
2. Ambra Poggi, 2008. "Job satisfaction, working conditions and job-expectations," LABORatorio R. Revelli Working Papers Series 74, LABORatorio R. Revelli, Centre for Employment Studies.
3. Elgin, Ceyhun & Kuzubas, Tolga Umut, 2013. "Wage-productivity gap in OECD economies," Economics Discussion Papers 2013-18, Kiel Institute for the World Economy.
4. Giovanni Sulis, 2007. "Gender Wage Differentials in Italy: a Structural Estimation Approach," Working Paper CRENoS 200715, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
   
   • Giovanni Sulis, 2011. "Gender wage differentials in Italy: a structural estimation approach," Journal of Population Economics, Springer, vol. 25(1), pages 53-87, October.

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