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Estimating models of on-the-job search using record statistics

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  • Gadi Barlevy

Abstract

This paper proposes a methodology for estimating job search models that does not require either functional form assumptions or ruling out the presence of unobserved variation in worker ability. In particular, building on existing results from record- value theory, a branch of statistics that deals with the timing and magnitude of extreme values in sequences of random variables, I show how we can use wage data to identify the distribution from which workers search. Applying this insight to wage data in the NLSY dataset, I show that the data supports the hypothesis that the wage oer distribution is Pareto, but not that it is lognormal.

Suggested Citation

  • Gadi Barlevy, 2003. "Estimating models of on-the-job search using record statistics," Working Paper Series WP-03-18, Federal Reserve Bank of Chicago.
    • Handle: RePEc:fip:fedhwp:wp-03-18
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    References listed on IDEAS

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    Cited by:

    1. Shouyong Shi, 2009. "Directed Search for Equilibrium Wage-Tenure Contracts," Econometrica, Econometric Society, vol. 77(2), pages 561-584, March.
    2. Fabien Postel-Vinay & Hélène Turon, 2010. "On-The-Job Search, Productivity Shocks, And The Individual Earnings Process," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 51(3), pages 599-629, August.
    3. Eric French & Bhashkar Mazumder & Christopher Taber, 2005. "The changing pattern of wage growth for low skilled workers," Working Paper Series WP-05-24, Federal Reserve Bank of Chicago.
    4. Ching-Chung Kuo, 2011. "Optimal assignment of resources to strengthen the weakest link in an uncertain environment," Annals of Operations Research, Springer, vol. 186(1), pages 159-173, June.
    5. Uta Schönberg, 2007. "Wage Growth Due to Human Capital Accumulation and Job Search: A Comparison between the United States and Germany," ILR Review, Cornell University, ILR School, vol. 60(4), pages 562-586, July.
    6. Jesper Bagger & Morten Henningsen, 2008. "Job Durations and the Job Search Model: A Two-Country, Multi-Sample Analysis," Discussion Papers 553, Statistics Norway, Research Department.
    7. Gregory Veramendi, 2012. "Labor Market Dynamics: A Model of Search and Human Capital Accumulation," 2012 Meeting Papers 1059, Society for Economic Dynamics.

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    Keywords

    Employment (Economic theory);

    JEL classification:

    • F1 - International Economics - - Trade
    • F3 - International Economics - - International Finance

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