Advanced Search
MyIDEAS: Login

Wage Dispersion with Heterogeneous Firm Technologies and Worker Abilities: An Equilibrium Job Search Model for Matched Employer-Employee Data

Contents:

Author Info

  • Postel Vinay Fabien
  • Robin Jean Marc

    ()

Abstract

An equilibrium job search model with on-the-job-search is presented and solved, in which we allow firms to implement optimal wage posting strategies in the sense that they leave no rent to their employees and counter the offers received by their employees from competing firms. Unobserved worker productive heterogeneity is introduced in the form of cross-worker differences in a `competence' parameter. On the other side of the market, firms also are heterogeneous with respect to their (observable) marginal productivity of labor. The theoretical model can be solved in closed-form and typically delivers a hump-shaped aggregate earnings distribution that reflects both firm- and worker-heterogeneity. The fit to the observed earnings distributions is very good. The model also fits the observed distributions of firm sizes in the populations of workers and firms. Finally, it delivers both between- and within-firm endogenous wage dispersion. The structural model is estimated using matched employer and employee French panel data. Its fit to the data is good. We then use the results for two applications. The first one is a decomposition of the log-wage means and variances into additive firm and person effects. We find that the share explained by the person effect varies across skill groups, and is generally much smaller than what was found in previous analyses of the same panel. Specifically, this share lies close to 50% for high-skilled white collars, and quickly decreases to 0% as the observed skill level decreases. The second application is a look at the anatomy of the `matching technology'. We find evidence of nonmonotonic relationships between firm sizes, productivities and recruiting efforts.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.inra.fr/Internet/Departements/ESR/UR/lea/documents/wp/wp0008.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Laboratoire d'Economie Appliquee, INRA in its series Research Unit Working Papers with number 0008.

as in new window
Length: 59 pages
Date of creation: Oct 2000
Date of revision:
Handle: RePEc:lea:leawpi:0008

Contact details of provider:
Postal: INRA-LEA, 48, Boulevard Jourdan, 75014 Paris, France
Phone: 331 43136364
Fax: 331 43136362
Web page: http://www.inra.fr/Internet/Departements/ESR/UR/lea/index.html

Related research

Keywords: Labor market frictions; wage dispersion; log wage variance decomposition.;

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:lea:leawpi:0008. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Madeleine Roux) The email address of this maintainer does not seem to be valid anymore. Please ask Madeleine Roux to update the entry or send us the correct address.

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.