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Wage Dispersion and Equilibrium Search. Models: Some Evidence from Italy

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Author Info
Giovanni Sulis ()

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Abstract

This paper provides a structural estimation of an equilibrium search model with on-thejob search and heterogeneity in firms' productivities using a sample of Italian workers. Allowing for productivity differentials among firms, the model is able to fit the wage distribution satisfactorily. Results indicate that arrival rates of offers for workers are higher when unemployed than when employed and firms exploit their monopsnony power when setting wages. As a result, workers earn far less than their marginal product. The paper also provides an estimate of the underlying distribution of productivity across firms. Geographical stratification reveals also interesting differences in transition parameters across workers.

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Publisher Info
Paper provided by Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia in its series Working Paper CRENoS with number 200402.

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Date of creation: 2004
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Handle: RePEc:cns:cnscwp:200402

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Related research
Keywords: Equilibrium Search Models; Wage Dispersion; Search Frictions; Monopsony; Productivity Differentials.;

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Find related papers by JEL classification:
C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data
C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis
C61 - Mathematical and Quantitative Methods - - Mathematical Methods and Programming - - - Optimization Techniques; Programming Models; Dynamic Analysis
D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
J64 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment: Models, Duration, Incidence, and Job Search

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  1. Carlos Carrillo Tudela, 2005. "Wage-Experience Contracts and Employment Status," Economics Discussion Papers 600, University of Essex, Department of Economics. [Downloadable!]
  2. Giovanni Sulis, 2007. "Gender Wage Differentials in Italy: a Structural Estimation Approach," Working Paper CRENoS 200715, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia. [Downloadable!]
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