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Technical appendix for \"Frictional wage dispersion in search models: a quantitative assessment\"

Author

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  • Andreas Hornstein
  • Per Krusell
  • Giovanni L. Violante

Abstract

In this Technical Appendix to Hornstein, Krusell, and Violante (2006) (HKV, 2006, hereafter) we provide a detailed characterization of the search model with (1) wage shocks during employment and (2) on-the-job search outlined in Sections 6 and 7 of that paper, and we derive all of the results that are only stated in HKV (2006). In particular, we derive the expressions for our preferred measure of frictional wage inequality: the ratio of average wages to the reservation wage, or, the `mean-min' wage ratio.

Suggested Citation

  • Andreas Hornstein & Per Krusell & Giovanni L. Violante, 2006. "Technical appendix for \"Frictional wage dispersion in search models: a quantitative assessment\"," Working Paper 06-08, Federal Reserve Bank of Richmond.
    • Handle: RePEc:fip:fedrwp:06-08
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    References listed on IDEAS

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    1. Bent Jesper Christensen & Rasmus Lentz & Dale T. Mortensen & George R. Neumann & Axel Werwatz, 2005. "On-the-Job Search and the Wage Distribution," Journal of Labor Economics, University of Chicago Press, vol. 23(1), pages 31-58, January.
    2. Andreas Hornstein & Per Krusell & Giovanni L. Violante, 2011. "Frictional Wage Dispersion in Search Models: A Quantitative Assessment," American Economic Review, American Economic Association, vol. 101(7), pages 2873-2898, December.
    3. Dale T. Mortensen & Christopher A. Pissarides, 1994. "Job Creation and Job Destruction in the Theory of Unemployment," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 61(3), pages 397-415.
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    Cited by:

    1. Kwon, Illoong & Meyersson Milgrom, Eva M., 2014. "The significance of firm and occupation specific human capital for hiring and promotions," Labour Economics, Elsevier, vol. 31(C), pages 162-173.
    2. Per Krusell, 2007. "EconomicDynamics Interviews Per Krusell on Search and Matching," EconomicDynamics Newsletter, Review of Economic Dynamics, vol. 8(2), April.
    3. Giorgio Brunello & Margherita Fort & Guglielmo Weber, 2009. "Changes in Compulsory Schooling, Education and the Distribution of Wages in Europe," Economic Journal, Royal Economic Society, vol. 119(536), pages 516-539, March.
    4. Julien, Benoit & Kennes, John & King, Ian Paul, 2011. "Implementing the Mortensen rule in a frictional labor market," Journal of Macroeconomics, Elsevier, vol. 33(1), pages 80-91, March.
    5. Violante, Giovanni & Hornstein, Andreas, 2006. "Frictional Wage Dispersion in Search Models: A Quantitative Approach," CEPR Discussion Papers 5935, C.E.P.R. Discussion Papers.
    6. Andreas Hornstein & Per Krusell & Giovanni L. Violante, 2011. "Frictional Wage Dispersion in Search Models: A Quantitative Assessment," American Economic Review, American Economic Association, vol. 101(7), pages 2873-2898, December.

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