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Endogenous job destructions and the distribution of wages

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  • Chéron, Arnaud
  • Rouland, Bénédicte

Abstract

This paper considers a matching model with both idiosyncratic productivity shocks that hit jobs at random and heterogeneity of workers according to ex ante unobservable abilities. We argue that firms' decisions about reservation productivity can help explain the shape of wage distributions. This is shown from numerical experiments, calibrated to French data, by considering alternative ranges of productivity shocks.

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Bibliographic Info

Article provided by Elsevier in its journal Labour Economics.

Volume (Year): 18 (2011)
Issue (Month): 6 ()
Pages: 845-852

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Handle: RePEc:eee:labeco:v:18:y:2011:i:6:p:845-852

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Web page: http://www.elsevier.com/locate/labeco

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Keywords: Wage distribution; Matching; Firing; Heterogeneity;

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  17. Mortensen, Dale T & Pissarides, Christopher, 1999. "New Developments in Models of Search in the Labour Market," CEPR Discussion Papers 2053, C.E.P.R. Discussion Papers.
  18. Shimer Robert & Smith Lones, 2001. "Matching, Search, and Heterogeneity," The B.E. Journal of Macroeconomics, De Gruyter, vol. 1(1), pages 1-18, April.
  19. James Albrecht & Susan Vroman, 2000. "A Matching Model with Endogenous Skill Requirements," Econometric Society World Congress 2000 Contributed Papers 0774, Econometric Society.
  20. Merz, Monika, 1995. "Search in the labor market and the real business cycle," Journal of Monetary Economics, Elsevier, vol. 36(2), pages 269-300, November.
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