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Estimating Equilibrium Search Models from Finnish Data

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  • Kyyrä, Tomi

Abstract

Empirical equilibrium search models have attracted a growing interest in recent years. Estimation of such models has not been completely successful, however. This has led researchers to develop more sophisticated versions of the models, in an attempt to get a better fit to the data. This study investigates whether various proposed specifications are able to explain the labour market histories observed in Finnish panel data. We begin with a pure search model in which all wage dispersion results from search frictions. Then we proceed to more complex specifications by introducing measurement error in wages and unobserved employer heterogeneity.

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  • Kyyrä, Tomi, 2001. "Estimating Equilibrium Search Models from Finnish Data," Discussion Papers 256, VATT Institute for Economic Research.
  • Handle: RePEc:fer:dpaper:256
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    Keywords

    Search theory; wage dispersion; labour market; Labour market; Työmarkkinat; Labor market and policies promoting economic growth; Työmarkkinat ja kasvua tukeva politiikka; C000 - Mathematical and Quantitative Methods: General; D210 - Firm Behavior; J300 - Wages; Compensation; and Labor Costs: General; J400 - Particular Labor Markets: General;

    JEL classification:

    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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