Residual Wage Disparity And Coordination Unemployment
AbstractHow much of residual wage dispersion can be explained by an absence of coordination among firms? To answer, we construct a dynamic directed search model with identical workers where firms can create high- or low-productivity jobs and are uncoordinated in their offers to workers, calibrated to the U.S. economy. Workers can exploit ex post opportunities once approached by firms, and can conduct on-the-job search. The stationary equilibrium wage distribution is hump-shaped, skewed significantly to the right, and, with baseline parameters, generates residual dispersion statistics 75-90% of those found empirically. However, the model underestimates the average duration of unemployment. Copyright 2006 by the Economics Department Of The University Of Pennsylvania And Osaka University Institute Of Social And Economic Research Association.
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Bibliographic InfoArticle 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): 47 (2006)
Issue (Month): 3 (08)
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Other versions of this item:
- Benoit Julien & John Kennes & Ian King, 2001. "Residual Wage Disparity and Coordination Unemployment," CAM Working Papers 2004-20, University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics, revised Nov 2004.
- E24 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- E25 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- J64 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment: Models, Duration, Incidence, and Job Search
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- Benoît Julien & John Kennes & Ian King & Sephorah Mangin, 2009.
"Directed search, unemployment and public policy,"
Canadian Journal of Economics,
Canadian Economics Association, vol. 42(3), pages 956-983, August.
- John Kennes & Daniel le Maire, 2013. "Job Heterogeneity and Coordination Frictions," Economics Working Papers 2013-09, School of Economics and Management, University of Aarhus.
- Ronald Wolthoff, 2009. "Ex Ante and Ex Post Inefficiency in Search and Matching Models," 2009 Meeting Papers 774, Society for Economic Dynamics.
- repec:ltr:wpaper:2010.03 is not listed on IDEAS
- Derek G. Stacey, 2012.
"Information, Commitment, and Separation in Illiquid Housing Markets,"
1289, Queen's University, Department of Economics.
- Derek Stacey, 2012. "Information, Commitment, and Separation in Illiquid Housing Markets," 2012 Meeting Papers 401, Society for Economic Dynamics.
- Lawrence Uren & Ian King & Suren Basov, 2011.
"The Employed, the Unemployed, and the Unemployable: Directed Search with Worker Heterogeneity,"
2011 Meeting Papers
292, Society for Economic Dynamics.
- Suren Basov & John Ian King & Lawrence Uren, 2010. "The Employed, the Unemployed, and the Unemployable: Directed Search with Worker Heterogeneity," Working Papers 2010.03, School of Economics, La Trobe University.
- Suren Basov & Ian King & Lawrence Uren, 2010. "The Employed, the Unemployed, and the Unemployable: Directed Search with Worker Heterogeneity," Department of Economics - Working Papers Series 1094, The University of Melbourne.
- John Kennes & Daniel le Maire, 2010. "Coordination Frictions and Job Heterogeneity: A Discrete Time Analysis," Economics Working Papers 2010-05, School of Economics and Management, University of Aarhus.
- Wolthoff, Ronald P., 2011. "It's About Time: Implications of the Period Length in an Equilibrium Job Search Model," IZA Discussion Papers 6002, Institute for the Study of Labor (IZA).
- John Kennes, 2008. "Technology Dispersion and Labor Market Fluctuations," 2008 Meeting Papers 1061, Society for Economic Dynamics.
- Aaron Schiff & Martin Browning & John Kennes, 2005. "Lots of Heterogeneity in a Matching Model," 2005 Meeting Papers 799, Society for Economic Dynamics.
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