Job Separation Under Uncertainty and the Wage Distribution
This paper examines a search-matching model in which match specific output follows a geometric Brownian motion. As opposed to Poisson Processes, Brownian motions generate a negative correlation between job output and the likelihood of separation. Introducing geometric Brownian motion improves the fit of the standard model with respect to the observed patterns of worker turnover and wage dispersion, without taking from its relevance at the macro level. Firstly, the proposed set-up does not require learning about match quality in order to yield a hump-shaped hazard rate of job separation. Secondly, the aggregate wage distribution is unimodal and its right tail belongs to the Pareto family, so it satisfies the "heavy-tail" property that is commonly observed in the data.
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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 6 (2006)
Issue (Month): 1 (January)
|Contact details of provider:|| Web page: http://www.degruyter.com|
|Order Information:||Web: http://www.degruyter.com/view/j/bejm|
When requesting a correction, please mention this item's handle: RePEc:bpj:bejmac:v:contributions.6:y:2006:i:1:n:2. 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: (Peter Golla)
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.