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Variations in offer arrival rates in a stationary search model : a note

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  • Rao Sahib, Padma

    (Groningen University)

Abstract

The standard search model predicts that the hazard and the expected accepted wage should be constant over an unemployment spell. This note shows that heterogeneity in job o®er arrival rates can generate declining hazards and declining accepted wages, results in conformity with the empirical evidence. In addition, two testable implications are derived. The first is a relationship between the rate of change of the aggregate hazard over time and the variance of the hazard; and the second between the rate of change over time of the expected accepted wage and the covariance between the expected accepted wage and the hazard.

Suggested Citation

  • Rao Sahib, Padma, 2001. "Variations in offer arrival rates in a stationary search model : a note," Research Report 01D20, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
    • Handle: RePEc:gro:rugsom:01d20
    as

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    File URL: http://irs.ub.rug.nl/ppn/217984320
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    References listed on IDEAS

    as
    1. Devine, Theresa J. & Kiefer, Nicolas M., 1991. "Empirical Labor Economics: The Search Approach," OUP Catalogue, Oxford University Press, number 9780195059366.
    2. Rao Sahib, Padma, 1998. "Offer heterogeneity in the standard search model: Implications for the duration of unemployment and reemployment wages," Labour Economics, Elsevier, vol. 5(2), pages 205-215, June.
    3. Heckman, James J & Borjas, George J, 1980. "Does Unemployment Cause Future Unemployment? Definitions, Questions and Answers from a Continuous Time Model of Heterogeneity and State Dependence," Economica, London School of Economics and Political Science, vol. 47(187), pages 247-283, August.
    4. Kenneth Burdett & Tara Vishwanath, 1988. "Declining Reservation Wages and Learning," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 55(4), pages 655-665.
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