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Measuring Labor Market Frictions: A Cross-Country Comparison

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Author Info
Ridder, Geert (University of Southern California)
van den Berg, Gerard J. () (Free University of Amsterdam, Tinbergen Institute, IFAU-Uppsala, INSEE-CREST, CEPR and IZA Bonn)

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Abstract

In this paper we define and estimate measures of labor market frictions using data on job durations. We compare different estimation methods and different types of data. We propose and apply an unconditional inference method that can be applied to aggregate duration data. It does not require wage data, it is invariant to the way in which wages are determined, and it allows workers to care about other job characteristics. The empirical analysis focuses on France, but we perform separate analyses for the USA, the UK, Germany and the Netherlands. We quantify the monopsony power due to search frictions and we examine the policy effects of the minimum wage, unemployment benefits and search frictions.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 814.

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Length: 31 pages
Date of creation: Jul 2003
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Handle: RePEc:iza:izadps:dp814

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Related research
Keywords: wages search frictions cross-country comparisons monopsony power minimum wage job search mobility labor market policy

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Find related papers by JEL classification:
J6 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies
J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
C4 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics
C5 - Mathematical and Quantitative Methods - - Econometric Modeling

Cited by:
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  1. Gerard J. van den Berg & Aico van Vuuren, 2006. "The Effect of Search Frictions on Wages," Tinbergen Institute Discussion Papers 06-077/3, Tinbergen Institute. [Downloadable!]
    Other versions:
  2. Jens Rubart & Willi Semmler, 2007. "East German Unemployment from a Macroeconomic Perspective," Darmstadt Discussion Papers in Economics 187, Institut für Volkswirtschaftslehre (Department of Economics), Technische Universität Darmstadt (Darmstadt University of Technology). [Downloadable!]
  3. Jens Rubart, 2006. "Dismissal Protection or Wage Flexibility," Computing in Economics and Finance 2006 406, Society for Computational Economics. [Downloadable!]
  4. Andreas Hornstein & Per Krusell & Giovanni L. Violante, 2005. "The replacement problem in frictional economies : a near equivalence result," Working Paper 05-01, Federal Reserve Bank of Richmond. [Downloadable!]
    Other versions:
  5. Giovanni Sulis, 2007. "Gender Wage Differentials in Italy: a Structural Estimation Approach," Working Paper CRENoS 200715, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia. [Downloadable!]
  6. Hornstein, Andreas & Krusell, Per & Violante, Giovanni L, 2005. "The Replacement Problem in Frictional Economies: An 'Equivalence Result'," CEPR Discussion Papers 5026, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  7. Bart Hobijn & Aysegül Sahin, 2007. "Job-finding and separation rates in the OECD," Staff Reports 298, Federal Reserve Bank of New York. [Downloadable!]
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