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The Rate of Learning-by-Doing: Estimates from a Search-Matching Model

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  • Julien Prat

    ()
    (Economics Vienna University)

Abstract

We construct and estimate by maximum likelihood an equilibrium search model where wages are set by Nash bargaining and idiosyncratic productivity follows a geometric Brownian motion. The proposed framework enables us to endogenize job destruction and to estimate the rate of learning-by-doing. Although the range of the observations is not independent of the parameters, we establish that the estimators satisfy asymptotic normality. The structural model is estimated using Current Population Survey data on accepted wages and employment durations. We show that it captures almost perfectly the evolution through tenure of the crosssectional distribution of wages. We find that the returns to tenure are slightly higher for workers without tertiary education than for tertiary educated workers

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Bibliographic Info

Paper provided by Society for Economic Dynamics in its series 2006 Meeting Papers with number 647.

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Date of creation: 03 Dec 2006
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Handle: RePEc:red:sed006:647

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Keywords: Job Search; Uncertainty; Structural Estimation;

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Cited by:
  1. Andrea Vindigni & Cristina Tealdi, 2012. "Uncertainty and the Politics of Employment Protection," Working Papers 6/2012, IMT Institute for Advanced Studies Lucca, revised May 2013.
  2. Bowlus, Audra J. & Liu, Huju, 2013. "The contributions of search and human capital to earnings growth over the life cycle," European Economic Review, Elsevier, vol. 64(C), pages 305-331.
  3. Paul Bingley & Lorenzo Cappellari & Niels Westergård‐Nielsen, 2013. "Unemployment Insurance, Wage Dynamics and Inequality Over the Life Cycle," Economic Journal, Royal Economic Society, vol. 0, pages 341-372, 05.

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