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Wage Dispersion and Equilibrium Search. Models: Some Evidence from Italy

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  • G. Sulis

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Abstract

This paper provides a structural estimation of an equilibrium search model with on-thejob search and heterogeneity in firms productivities using a sample of Italian workers. Allowing for productivity differentials among firms, the model is able to fit the wage distribution satisfactorily. Results indicate that arrival rates of offers for workers are higher when unemployed than when employed and firms exploit their monopsnony power when setting wages. As a result, workers earn far less than their marginal product. The paper also provides an estimate of the underlying distribution of productivity across firms. Geographical stratification reveals also interesting differences in transition parameters across workers.

Suggested Citation

  • G. Sulis, 2004. "Wage Dispersion and Equilibrium Search. Models: Some Evidence from Italy," Working Paper CRENoS 200402, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
  • Handle: RePEc:cns:cnscwp:200402
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Ceyhun ELGİN & Tolga Umut KUZUBAŞ, 2012. "Wage-Productivity Gap in Turkish Manufacturing Sector," Iktisat Isletme ve Finans, Bilgesel Yayincilik, vol. 27(316), pages 09-31.
    2. Shaimaa Yassin, 2013. "Structural Labor Market Transitions and Wage Dispersion in Egypt and Jordan," Working Papers 753, Economic Research Forum, revised May 2013.
    3. Giovanni Sulis, 2012. "Gender wage differentials in Italy: a structural estimation approach," Journal of Population Economics, Springer;European Society for Population Economics, vol. 25(1), pages 53-87, January.
    4. Elgin, Ceyhun & Kuzubas, Tolga Umut, 2013. "Wage-productivity gap in OECD economies," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy (IfW), vol. 7, pages 1-21.
    5. Carrillo-Tudela, C, 2005. "Wage-Experience Contracts and Employment Status," Economics Discussion Papers 2733, University of Essex, Department of Economics.

    More about this item

    Keywords

    equilibrium search models; wage dispersion; search frictions; monopsony;

    JEL classification:

    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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