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The Rate of Learning-by-Doing: Estimates from a Search-Matching Model

  • Julien Prat

    ()

    (Economics Vienna University)

We construct and estimate by maximum likelihood an equilibrium search model where wages are set by Nash bargaining and idiosyncratic productivity follows a geometric Brownian motion. The proposed framework enables us to endogenize job destruction and to estimate the rate of learning-by-doing. Although the range of the observations is not independent of the parameters, we establish that the estimators satisfy asymptotic normality. The structural model is estimated using Current Population Survey data on accepted wages and employment durations. We show that it captures almost perfectly the evolution through tenure of the crosssectional distribution of wages. We find that the returns to tenure are slightly higher for workers without tertiary education than for tertiary educated workers

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Paper provided by Society for Economic Dynamics in its series 2006 Meeting Papers with number 647.

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Date of creation: 03 Dec 2006
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Handle: RePEc:red:sed006:647
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