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Identification of Search Models using Record Statistics

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Author Info
GADI BARLEVY

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Abstract

This paper shows how record-value theory, a branch of statistics that deals with the timing and magnitude of extreme values in sequences of random variables, can be used to recover features of the wage offer distribution in conventional search models. Using National Longitudinal Survey of Youth (NLSY) wage data, I show that the data are not compatible with specifications for the offer distribution characterized by extreme negative skewness. In addition, I show that my approach can be used to construct a bound on the returns to job seniority. My results suggest that job seniority plays only a minor role in the wage growth of the workers surveyed in the NLSY. Copyright 2008 The Review of Economic Studies Limited.

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File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1467-937X.2007.00459.x
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Publisher Info
Article provided by Blackwell Publishing in its journal Review of Economic Studies.

Volume (Year): 75 (2008)
Issue (Month): 1 (01)
Pages: 29-64
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Handle: RePEc:bla:restud:v:75:y:2008:i:1:p:29-64

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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0034-6527

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  1. Gadi Barlevy & H.N. Nagaraja, 2006. "Identification of Search Models with Initial Condition Problems," NBER Working Papers 12166, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  2. Joseph G. Altonji & Anthony Smith & Ivan Vidangos, 2009. "Modeling Earnings Dynamics," NBER Working Papers 14743, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  3. Shintaro Yamaguchi, 2009. "Job Search, Bargaining, and Wage Dynamics," Global COE Hi-Stat Discussion Paper Series gd08-026, Institute of Economic Research, Hitotsubashi University. [Downloadable!]
    Other versions:
  4. Gadi Barlevy & H. N. Nagaraja, 2005. "Characterizations in a random record model with a non-identically distributed initial record," Working Paper Series WP-05-05, Federal Reserve Bank of Chicago. [Downloadable!]
  5. Burdett, Ken & Carrillo-Tudela, Carlos & Coles, Melvyn, 2009. "Human Capital Accumulation and Labour Market Equilibrium," IZA Discussion Papers 4215, Institute for the Study of Labor (IZA). [Downloadable!]
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