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Labor Market Matching, Wages, and Amenities

Author

Listed:
  • Lamadon, Thibaut

    (University of Chicago)

  • Lise, Jeremy

    (Cornell University)

  • Meghir, Costas

    (Yale University)

  • Robin, Jean-Marc

    (Sciences Po.)

Abstract

This paper develops the nonparametric identification of models with production complementarities, worker-firm specific disutility of labor and search frictions. Mobility in the model is subject to preference shocks, and we assume that firms can write wage contracts. We develop a constructive proof for the nonparametric identification of the model primitives from matched employer-employee data. We use the estimated model to decompose the sources of wage dispersion into worker heterogeneity, compensating differentials, and search frictions that generate between-firm and within-firm dispersion. We find that compensating differentials are substantial on average, but the contribution differs greatly betweenthe lowest and highest types of workers. Finally, we use the model to provide an economic interpretation of several empirical regularities.

Suggested Citation

  • Lamadon, Thibaut & Lise, Jeremy & Meghir, Costas & Robin, Jean-Marc, 2024. "Labor Market Matching, Wages, and Amenities," Working Paper Series 2024:13, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    • Handle: RePEc:hhs:ifauwp:2024_013
    as

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    References listed on IDEAS

    as
    1. Morchio, Iacopo & Moser, Christian, 2018. "The Gender Pay Gap: Micro Sources and Macro Consequences," MPRA Paper 99276, University Library of Munich, Germany, revised 24 Mar 2020.
    2. Stéphane Bonhomme & Kerstin Holzheu & Thibaut Lamadon & Elena Manresa & Magne Mogstad & Bradley Setzler, 2023. "How Much Should We Trust Estimates of Firm Effects and Worker Sorting?," Journal of Labor Economics, University of Chicago Press, vol. 41(2), pages 291-322.
    3. Stéphane Bonhomme & Thibaut Lamadon & Elena Manresa, 2019. "A Distributional Framework for Matched Employer Employee Data," Econometrica, Econometric Society, vol. 87(3), pages 699-739, May.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Escudero, Veronica & Liepmann, Hannah & Vergara, Damian, 2024. "Directed Search, Wages, and Non-wage Amenities: Evidence from an Online Job Board," IZA Discussion Papers 17211, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    workfirm; labor; searchfrictions;
    All these keywords.

    JEL classification:

    • A00 - General Economics and Teaching - - General - - - General

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