Note on the Determinants of Wage Dispersion
The purpose of this note is to explain theoretically the observed entire density of wages which is hump-shaped and right-skewed. I extend the model brought up by Halko et al . (2008) to introduce heterogeneity of firmfs productivity. It causes a difference in the support of wage offers, a wider (narrower) range for high (low) productivity firms. The different support roughly results in the observed wage dispersion because low wage offers are made by all firms (right-skewed), whereas high wage offers are made by only high producivity firms.
|Date of creation:||Dec 2008|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.econ.osaka-u.ac.jp/|
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- Bontemps, C. & Robin, J.M. & van den Berg, G.J., 1998.
"Equilibrium Search with Continuous Productivity Dispersion: Theory and Non-Parametric Estimation,"
98-07, Centre for Labour Market and Social Research, Danmark-.
- Bontemps, Christian & Robin, Jean-Marc & van den Berg, Gerard J, 2000. "Equilibrium Search with Continuous Productivity Dispersion: Theory and Nonparametric Estimation," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 41(2), pages 305-58, May.
- Christian Bontemps & Jean-Marc Robin & Gérard J. Van den Berg, 2000. "Equilibrium Search with Continuous Productivity Dispersion: Theory and Nonparametric Estimation," Post-Print hal-00357755, HAL.
- Marja-Liisa Halko & Klaus Kultti & and Juha Virrankoski, 2008. "Search Direction And Wage Dispersion," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 49(1), pages 111-134, 02.
- Daron Acemoglu & Robert Shimer, 2000. "Wage and Technology Dispersion," Review of Economic Studies, Oxford University Press, vol. 67(4), pages 585-607.
- James D. Montgomery, 1991. "Equilibrium Wage Dispersion and Interindustry Wage Differentials," The Quarterly Journal of Economics, Oxford University Press, vol. 106(1), pages 163-179.
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