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Structural and Frictional Unemployment in an Equilibrium Search Model with Heterogeneous Agents

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  • Koning, Pierre
  • Ridder, Geert
  • van den Berg, Gerard J

Abstract

We specify and estimate an equilibrium search model with between-market heterogeneity in the productivity levels. The model allows for two types of unemployment: unemployment due to search frictions and unemployment due to wage floors. Wage floors may exist, because of large unemployment benefits or a binding (mandatory) minimum wage. Using data on labor market histories for a sample of Dutch workers, we decompose the total unemployment rate in a structural and frictional unemployment rate. We also discuss the effect of changes in the minimum wage. Copyright 1995 by John Wiley & Sons, Ltd.

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  • Koning, Pierre & Ridder, Geert & van den Berg, Gerard J, 1995. "Structural and Frictional Unemployment in an Equilibrium Search Model with Heterogeneous Agents," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 10(S), pages 133-151, Suppl. De.
  • Handle: RePEc:jae:japmet:v:10:y:1995:i:s:p:s133-51
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