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Empircial labor search models: A survey

  • Eckstein, Zwi

    ()

    (Tel Aviv University, The University of Minnesota, CEPR)

  • van den Berg, Gerard J

    ()

    (Free University Amsterdam, Tinbergen Institute, IFAU, CEPR)

This paper surveys the existing empirical research that uses search theory to empirically analyze labor supply questions in a structural framework, using data on individual labor market transitions and durations, wages, and individual characteristics. The starting points of the literature are the Mincerian earnings function, Heckman’s classic selection model, and dynamic optimization theory. We develop a general framework for the labor market where the search for a job involves dynamic decision making under uncertainity. It can be specialized to be in agreement with most published research using labor search models. We discuss estimation, policy evaluation with the estimated model, equilibrium model versions, and the decomposition of wage variation into factors due to heterogeneity of various model determinants as well as search frictions themselves. We summarize the main empirical conclusions.

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Paper provided by IFAU - Institute for Evaluation of Labour Market and Education Policy in its series Working Paper Series with number 2003:18.

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Length: 42 pages
Date of creation: 17 Sep 2003
Date of revision:
Handle: RePEc:hhs:ifauwp:2003_018
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