Search, layoffs and reservation wages when job offers follow a stochastic process
AbstractDespite the fact that the empirical data indicate the presence of non- stationarity in wage offer distributions, the majority of job-search models are stationary. We model logs of wage offers as a Markov process with i.i.d. increments and solve two typical job-search models for reservation wages, value functions and expected individual duration of unemployment. All solutions are in the closed form and admit interpretation in terms of expected present values of certain streams of payoffs.
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Bibliographic InfoPaper provided by EconWPA in its series Macroeconomics with number 0409014.
Length: 29 pages
Date of creation: 17 Sep 2004
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Note: Type of Document - pdf; pages: 29
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reservation wage; supremum process; Wiener-Hopf factorization;
Find related papers by JEL classification:
- E - Macroeconomics and Monetary Economics
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-09-30 (All new papers)
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