This paper applies an equilibrium search to study the transition from schooling to work of U.S. high school graduates. We consider the case where there is heterogeneity in firm productivity and the number of firm types is discrete. For this case the estimation problem is non-standard and the likelihood function is non-differentiable. This paper provides a computational method to obtain the MLE and, through several Monte Carlo studies, characterizes the behavior of the estimator. Applying these methods to the transition from school to work, our results show that nonemployed blacks receive fewer offers than whites and employed blacks are more likely to lose their jobs. Importantly, employed blacks and whites receive job offers at the same rate. However, the difference in job destruction rates is so great that it accounts for three-quarters of the black-white wage differential.
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Paper provided by EconWPA in its series Labor and Demography with number
9705004.
Length: 43 pages Date of creation: 30 May 1997 Date of revision: Handle: RePEc:wpa:wuwpla:9705004
Note: Type of Document - MS Word-V7; prepared on IBM PC ; to print on Windows; pages: 43 ; figures: included Contact details of provider: Web page: http://129.3.20.41
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Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)
Bent Jesper Christensen & Rasmus Lentz & Dale T. Mortensen & George R. Neumann & Axel Werwatz, 2003.
"On the Job Search and the Wage Distribution,"
CAM Working Papers
2004-09, University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics.
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