Search Intensity, Directed Search And The Wage Distribution
AbstractWe propose a search equilibrium model in which homogenous rms post wages along with a vacancy to attract job-seekers, while homogenous unemployed workers invest in costly job-seeking. The key innovation relies on the organization of the search market and the search behavior of the job-seekers. The search market is continuously segmented by wage level, individuals can spread their search investment over the di¤erent sub-markets, and search intensity has marginal decreasing returns on each sub-market. We show that there exists a non-degenerate equilibrium wage distribution. The density of this wage distribution is increasing at low wages, and decreasing at high wages. Under additional restrictions, it is hump-shaped, and it can be right-tailed. Our results are illustrated by an example originating a Beta wage distribution.
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Bibliographic InfoPaper provided by HAL in its series Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) with number halshs-00638150.
Date of creation: 2011
Date of revision:
Publication status: Published, Journal of the European Economic Association, 2011, 9, 6, 20-38
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Search e¤ort; Segmented markets; Equilibrium wage dispersion;
Other versions of this item:
- Bruno Decreuse & André Zylberberg, 2011. "Search Intensity, Directed Search, And The Wage Distribution," Journal of the European Economic Association, European Economic Association, vol. 9(6), pages 1168-1186, December.
- NEP-ALL-2011-11-14 (All new papers)
- NEP-DGE-2011-11-14 (Dynamic General Equilibrium)
- NEP-LAB-2011-11-14 (Labour Economics)
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