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Equilibrium Search with Continuous Productivity Dispersion: Theory and Non-Parametric Estimation

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  • Bontemps, C.
  • Robin, J.M.
  • van den Berg, G.J.

Abstract

In this paper we theoretically and empirically analyze equilibrium search models of the labor market. The Burdett-Mortensen equilibrium search model is generalized by allowing for continuous distributions of firm productivity types within a given labor market. We characterize equilibrium and derive expressions for the endogenous equilibrium wage distributions. We then characterize the full set of wage (offer) distributions that can in principle be generated by the model. We develop a structural nonparametric estimation method for the productivity distribution. We estimate the model using French longitudinal survey data on labor supply, and we compare the results on the relation between productivities and wages to those obtained using a French panel dataset of firms.

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Bibliographic Info

Paper provided by Centre for Labour Market and Social Research, Danmark- in its series Papers with number 98-07.

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Date of creation: 1998
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Handle: RePEc:fth:clmsre:98-07

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Postal: Danmark; Centre for Labour Market and Social Research. Science Park Aarhus Wieds Vej 10C, 8000 Aarhus C, Danmark
Phone: +45 8942 2350
Fax: +45 8942 2365
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Web page: http://www.cls.dk/
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Keywords: ECONOMIC EQUILIBRIUM ; LABOUR MARKET ; WAGES ; MONOPOLIES Research. Science Park Aarhus Wieds Vej 10C; 8000 Aarhus C; Danmark. 36p.;

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