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Equilibrium Search Models and the Transition from School to Work

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Author Info
Bowlus, Audra J
Kiefer, Nicholas M
Neumann, George R

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Abstract

This paper applies the Burdett-Mortensen (1998) equilibrium search model to study the school to work transitions of U.S. high school graduates. We consider the case of discrete firm heterogeneity and provide a computational method to obtain the MLE. Our results show that unemployed blacks receive fewer offers than whites and employed blacks are more likely to lose their jobs. Importantly, employed blacks and whites receive job offers at the same rate. Assigning the whites' search parameters to the blacks and re-solving reveals that 75 percent of the observed wage differential is explained by the job destruction rate differences.

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Publisher Info
Article provided by Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association in its journal International Economic Review.

Volume (Year): 42 (2001)
Issue (Month): 2 (May)
Pages: 317-43
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Handle: RePEc:ier:iecrev:v:42:y:2001:i:2:p:317-43

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  1. Jesper Bagger and Morten Henningsen, 2008. "Job Durations and the Job Search Model: A Two-Country, Multi-Sample Analysis," Discussion Papers 553, Research Department of Statistics Norway. [Downloadable!]
  2. Arnaud Chéron & Jean-Olivier Hairault & François Langot, 2008. "A Quantitative Evaluation of Payroll Tax Subsidies For Low-Wage Workers : An Equilibrium Search Approach," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00270295_v1, HAL. [Downloadable!]
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  3. Lene Kromann, 2009. "Does Employee Body Weight Affect Employers' Behavior?," Economics Working Papers 2009-04, School of Economics and Management, University of Aarhus. [Downloadable!]
  4. Van den Berg, Gerard J., 2000. "Duration Models: Specification, Identification, and Multiple Durations," MPRA Paper 9446, University Library of Munich, Germany. [Downloadable!]
    Other versions:
  5. Gerard J. van den Berg, 1999. "Multiple Equilibria and Minimum Wages in Labor Markets with Informational Frictions and Heterogeneous Production Technologies," Tinbergen Institute Discussion Papers 99-085/3, Tinbergen Institute. [Downloadable!]
  6. Joel L. Horowitz & Sokbae Lee, 2002. "Semiparametric Estimation of a Panel Data Proportional Hazards Model with Fixed Effects," 10th International Conference on Panel Data, Berlin, July 5-6, 2002 A5-3, International Conferences on Panel Data. [Downloadable!]
    Other versions:
  7. Luca Flabbi, 2005. "Gender Discrimination Estimation in a Search Model with Matching and Bargaining," IZA Discussion Papers 1764, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  8. Gadi Barlevy, 2003. "Estimating models of on-the-job search using record statistics," Working Paper Series WP-03-18, Federal Reserve Bank of Chicago. [Downloadable!]
    Other versions:
  9. 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:
  10. Bas van der Klaauw & Aico van Vuuren & Peter Berkhout, 2004. "Labor Market Prospects, Search Intensity and the Transition from College to Work," Tinbergen Institute Discussion Papers 04-064/3, Tinbergen Institute. [Downloadable!]
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  11. Gerard J. van den Berg, 1998. "Empirical Inference with Equilibrium Search Models of the Labor Market," Tinbergen Institute Discussion Papers 98-089/3, Tinbergen Institute. [Downloadable!]
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  12. Jim Taylor & Anh Ngoc Nguyen, 2003. "Transition from school to first job: the influence of educational attainment," Working Papers 000060, Lancaster University Management School, Economics Department. [Downloadable!]
  13. Launov, Andrey, 2003. "A Study of the Austrian Labor Market Dynamics Using a Model of Search Equilibrium," IZA Discussion Papers 801, Institute for the Study of Labor (IZA). [Downloadable!]
  14. J. Ignacio Garcia-Perez, 2002. "Equilibrium search models: the role of the assumptions," Investigaciones Economicas, Fundación SEPI, vol. 26(2), pages 255-284, May. [Downloadable!]
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  15. Bent Jesper Christensen & Rasmus Lentz & Dale T. Mortensen & George R. Neumann & Axel Werwatz, 2003. "On the Job Search and the Wage Distribution," CAM Working Papers 2004-09, University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics. [Downloadable!]
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  16. Berg, Gerard J. van den, 1999. "Multiple equilibria and minimum wages in labor markets with informational frictions and heterogeneous production technologies," Serie Research Memoranda 0044, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics. [Downloadable!]
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  17. Gérard Van Den Berg & Aïco Van Vuuren, 2002. "Using Firm Data to Assess the Performance of Equilibrium Search Models of the Labor Market," Annales d'Economie et de Statistique, ADRES, issue 67-68, pages 09, Juillet-D. [Downloadable!]
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  18. Launov, Andrey & Wolff, Joachim & Klasen, Stephan, 2004. "Unemployment Benefits and Unemployment Rates of Low-Skilled and Elder Workers in West Germany: A Search Equilibrium Approach," IZA Discussion Papers 1161, Institute for the Study of Labor (IZA). [Downloadable!]
  19. Christian Holzner & Andrey Launov, 2005. "Search Equilibrium, Production Parameters and Social Returns to Education: Theory and Estimation," IZA Discussion Papers 1904, Institute for the Study of Labor (IZA). [Downloadable!]
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