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Using Firm Data to assess the Performance of Equilibrium Search Models of the Labor Market

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Author Info
Gerard J. van den Berg ()
Aico van Vuuren () (Vrije Universiteit Amsterdam)

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Abstract

Equilibrium search models are useful tools for the evaluation of labor market policies. Recently developed equilibrium search models of the labor market are able to fit the wage distribution perfectly with longitudinal labor supply data, by estimating an appropriate distribution of labor productivity across firms. This paper formally compares such structural estimates to their directly observed counterparts in firm data. More generally, we investigate the extent to which these models are able to explain the observed distributions of wages, productivities and firm sizes across firms, as well as the extent to which they are able to explain the observed relationships between these variables across firms. The parameters that capture search frictions are estimated with worker data that are matched to the firm data.

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Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 00-067/3.

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Date of creation: 31 Jul 2000
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Handle: RePEc:dgr:uvatin:20000067

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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.:
  1. Aico Van Vuuren & Gerard J. Van Den Berg & Geert Ridder, 2000. "Measuring the equilibrium effects of unemployment benefits dispersion," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 15(6), pages 547-574. [Downloadable!]
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  2. Fabien Postel-Vinay & Jean-Marc Robin, 2002. "Equilibrium Wage Dispersion with Worker and Employer Heterogeneity," Econometrica, Econometric Society, vol. 70(6), pages 2295-2350, November. [Downloadable!] (restricted)
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  3. 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. [Downloadable!] (restricted)
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  4. Horowitz, Joel L., 2001. "The Bootstrap," Handbook of Econometrics, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 5, chapter 52, pages 3159-3228 Elsevier. [Downloadable!] (restricted)
  5. Mortensen, Dale T. & Pissarides, Christopher A., 1999. "New developments in models of search in the labor market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 39, pages 2567-2627 Elsevier. [Downloadable!] (restricted)
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  6. Burdett, Kenneth & Vishwanath, Tara, 1988. "Balanced Matching and Labor Market Equilibrium," Journal of Political Economy, University of Chicago Press, vol. 96(5), pages 1048-65, October. [Downloadable!] (restricted)
  7. Andrews, Donald W K, 1988. "Chi-Square Diagnostic Tests for Econometric Models: Theory," Econometrica, Econometric Society, vol. 56(6), pages 1419-53, November. [Downloadable!] (restricted)
  8. John M. Abowd & Francis Kramarz & David N. Margolis, 1999. "High Wage Workers and High Wage Firms," Econometrica, Econometric Society, vol. 67(2), pages 251-334, March.
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  9. Bowlus, A.J. & Kiefer, N.M. & Neumann, G.R., 1997. "Equilibrium Search Models and The Transition from School to Work," Working Papers 97-05, University of Iowa, Department of Economics.
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  1. Tomi Kyyrä, 2001. "Estimating Equilibrium Search Models from Finnish Data," Discussion Papers 256, Government Institute for Economic Research Finland (VATT). [Downloadable!]
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