Job dynamics, correlated shocks and wage profiles
AbstractWe generalize the Mortensen-Pissarides (1994) model of the labor market with a more realistic structure for the stochastic process of the shocks to the worker-firm match. In this way we can acommodate the empirical observation that hazard rates of job termination decrease and average wages increase with job tenure. Besides being able to fit better some observables of the model, the changes we introduce are nontrivial for the analysis of policies as well.
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Bibliographic InfoPaper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number 260.
Date of creation: Jan 1998
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Layoff costs; search; layoff hazard rates; wage-tenure relationship;
Find related papers by JEL classification:
- J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
- J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
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