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Competing Auctions of Skills

Author

Listed:
  • John Kennes

    (Copenhagen University)

  • Daniel le Maire

    (Copenhagen University)

Abstract

The model of competing sellers in McAfee (1993) is applied to a labor market environment with heterogeneous workers, who differ by outside option and skill type, and heterogeneous firms, who differ by the amount of output produced when matched to each possible worker type. We derive both a static and a dynamic version of this model where workers can entertain offers while employed and unemployed. A simple estimated benchmark version of the dynamic model gives a reasonable approximation of the statistical moments of both the aggregate wage and productivity distributions in Denmark. We also use the simple benchmark model to explore further implications of the theory. For example, we find that observed inter-temporal changes in the overall distribution of wages are not predicted by a simple model of no-comparative advantage.

Suggested Citation

  • John Kennes & Daniel le Maire, 2013. "Competing Auctions of Skills," CAM Working Papers 2014_01, University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics.
  • Handle: RePEc:kud:kuieca:2014_01
    as

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    File URL: http://www.econ.ku.dk/cam/wp0910/CAMwp1_14.pdf/
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Competing auctions; on-the-job search; heterogeneous firms; skills; supermodularity; non-degenerate job offer distribution;

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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