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Matching, Sorting and Wages

Author

Listed:
  • Jeremy Lise

    (UCL - University College of London [London])

  • Costas Meghir

    (Department of Economics, University College London - UCL - University College of London [London])

  • Jean-Marc Robin

    (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique)

Abstract

We develop an empirical search-matching model with productivity shocks so as to analyze policy interventions in a labor market with heterogeneous agents. To achieve this we develop an equilibrium model of wage determination and employment, which is consistent with key empirical facts. As such our model extends the current literature on equilibrium wage determination with matching and provides a bridge between some of the most prominent macro models and microeconometric research. The model incorporates long-term contracts, on-the-job search and counter-offers, and a vacancy creation and destruction process linked to productivity shocks. Importantly, the model allows for the possibility of assortative matching between workers and jobs, a feature that had been ruled out by assumption in the empirical equilibrium search literature to date. We use the model to estimate the potential gain from an optimal unemployment insurance scheme, as well as the redistributive effects of such a policy

Suggested Citation

  • Jeremy Lise & Costas Meghir & Jean-Marc Robin, 2013. "Matching, Sorting and Wages," Post-Print hal-01070442, HAL.
  • Handle: RePEc:hal:journl:hal-01070442
    Note: View the original document on HAL open archive server: https://hal-sciencespo.archives-ouvertes.fr/hal-01070442
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    References listed on IDEAS

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