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Can the Mortensen-Pissarides Model with Productivity Changes Explain U.S. Wage Inequality?

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  • Linda Y. Wong

    (Binghamton University)

Abstract

This article examines whether the Mortensen-Pissarides matching model with productivity changes can explain the time pattern of wage inequality. The main finding is that the model produces counterfactual results. The main source of failure seems to be the exogenous matching function and/or the exogenous surplus share, neither of which allows firms to use wage policies to direct workers' searches.

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Bibliographic Info

Article provided by University of Chicago Press in its journal Journal of Labor Economics.

Volume (Year): 21 (2003)
Issue (Month): 1 (January)
Pages: 70-105

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Handle: RePEc:ucp:jlabec:v:21:y:2003:i:1:p:70-105

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Web page: http://www.journals.uchicago.edu/JOLE/

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Cited by:
  1. Andrew Kerr, 2012. "A Model of Comparative Advantage with Matching in the Urban Tanzanian Labour Market," Economics Series Working Papers WPS/2012-21, University of Oxford, Department of Economics.
  2. Ingram, Beth F. & Neumann, George R., 2006. "The returns to skill," Labour Economics, Elsevier, vol. 13(1), pages 35-59, February.
  3. Michael Sattinger, 2003. "Capital Intensity, Neutral Technological Change, and Earnings Inequality," Discussion Papers 03-05, University at Albany, SUNY, Department of Economics.
  4. Summerfield, Fraser, 2014. "Labor Market Conditions, Skill Requirements and Education Mismatch," CLSSRN working papers clsrn_admin-2014-19, Vancouver School of Economics, revised 28 Apr 2014.
  5. Xavier Cuadras Morató & Xavier Mateos-Planas, 2006. "Wage inequality and unemployment with overeducation," Economics Working Papers 938, Department of Economics and Business, Universitat Pompeu Fabra.
  6. Eran Yashiv, 2007. "Labor search and matching in macroeconomics," LSE Research Online Documents on Economics 19707, London School of Economics and Political Science, LSE Library.
  7. Yashiv, Eran, 2007. "Labor search and matching in macroeconomics," European Economic Review, Elsevier, vol. 51(8), pages 1859-1895, November.
  8. Yip, Chi Man, 2010. "Can't SBTC explain the U.S. wage inequality dynamics?," MPRA Paper 31198, University Library of Munich, Germany.

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