Structural Aspects of the Labor Markets of Five OECD Countries
AbstractThe simplest equilibrium search models depend on a few parameters that determine the joint distribution of unemployment spells, job spells, and wages. In this study we use aggregate data to estimate these key parameters for five OECD countries: (West-)Germany, The Netherlands, France, the United Kingdom and the USA. We show that in the simple model only information on the marginal distribution of wages and the marginal distributions of unemployment and job spells is needed to estimate the structural parameters. Thus, the methodological contribution of this paper is the demonstration that the model can be calibrated from readily available aggregate data, and that panel data on individuals are not necessary. Our estimation method provides a direct link between types of information and parameters. We show that data on job durations allow us to estimate an index of the search frictions, without the need to estimate the other parameters simultaneously. The parameters, the arrival rate of wage offers, the rate of job destruction, the average productivity of jobs, and the variation of job productivities are of interest in their own right. We also use the parameter estimates to obtain estimates of structuralunemployment due to wage floors, of the average level of monopsony power in the economy, and to make a decomposition of wage variation into variation due to productive differences between jobs and variation due to search frictions.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 97-001/4.
Date of creation: 07 Jan 1997
Date of revision:
Contact details of provider:
Web page: http://www.tinbergen.nl
Other versions of this item:
- Ridder, G. & Visser, N. de & Berg, G.J. van den, 1996. "Structural aspects of the labor markets of five OECD countries," Serie Research Memoranda 0046, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kenneth Burdett & Dale T. Mortensen, 1989. "Equilibrium Wage Differentials and Employer Size," Discussion Papers 860, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Gerard J. van den Berg & Geert Ridder, 1998.
"An Empirical Equilibrium Search Model of the Labor Market,"
Econometric Society, vol. 66(5), pages 1183-1222, September.
- Berg, G.J. & Ridder, G., 1993. "An empirical equilibrium search model of the labour market," Serie Research Memoranda 0039, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
- van den Berg, Gerard J, 1990.
"Search Behaviour, Transitions to Nonparticipation and the Duration of Unemployment,"
Royal Economic Society, vol. 100(402), pages 842-65, September.
- Berg, G.J. van den, 1988. "Search behaviour, transitions to nonparticipation and the duration of unemployment," Research Memorandum 338, Tilburg University, Faculty of Economics and Business Administration.
- Charles Brown & James L. Medoff, 1989.
"The Employer Size-Wage Effect,"
NBER Working Papers
2870, National Bureau of Economic Research, Inc.
- Koning, Pierre & Ridder, Geert & Berg, Gerard J. van den, 1994.
"Structural and frictional unemployment in an equilibrium search model with heterogeneous agents,"
Serie Research Memoranda
0052, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
- Koning, Pierre & Ridder, Geert & van den Berg, Gerard J, 1995. "Structural and Frictional Unemployment in an Equilibrium Search Model with Heterogeneous Agents," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 10(S), pages S133-51, Suppl. De.
- Topel, Robert H, 1991.
"Specific Capital, Mobility, and Wages: Wages Rise with Job Seniority,"
Journal of Political Economy,
University of Chicago Press, vol. 99(1), pages 145-76, February.
- Robert H. Topel, 1990. "Specific Capital, Mobility, and Wages: Wages Rise with Job Seniority," NBER Working Papers 3294, National Bureau of Economic Research, Inc.
- Altonji, Joseph G & Shakotko, Robert A, 1987.
"Do Wages Rise with Job Seniority?,"
Review of Economic Studies,
Wiley Blackwell, vol. 54(3), pages 437-59, July.
- Katharine G. Abraham & Henry S. Farber, 1986.
"Job Duration, Seniority and Earnings,"
407, Massachusetts Institute of Technology (MIT), Department of Economics.
- Oliver Jean Blanchard & Peter Diamond, 1989. "The Beveridge Curve," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 20(1), pages 1-76.
- Dale Mortensen, 1984.
"Job Search and Labor Market Analysis,"
594, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Krueger, Alan B & Summers, Lawrence H, 1988. "Efficiency Wages and the Inter-industry Wage Structure," Econometrica, Econometric Society, vol. 56(2), pages 259-93, March.
- Albrecht, James W & Axell, Bo, 1984.
"An Equilibrium Model of Search Unemployment,"
Journal of Political Economy,
University of Chicago Press, vol. 92(5), pages 824-40, October.
- Albrecht, James & Axell, Bo, 1983. "An Equilibrium Model of Search Unemployment," Working Papers 83-10, C.V. Starr Center for Applied Economics, New York University.
- Albrecht, James W & Axell, Bo, 1983. "An Equilibrium Model of Search Unemployment," Working Paper Series 99, Research Institute of Industrial Economics.
- Diamond, Peter A., 1971. "A model of price adjustment," Journal of Economic Theory, Elsevier, vol. 3(2), pages 156-168, June.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Antoine Maartens (+31 626 - 160 892)).
If references are entirely missing, you can add them using this form.