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Endogenous Job Destructions and the Distribution of Wages

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  • Arnaud Chéron
  • Bénédicte Rouland

Abstract

This paper considers a matching model with both idiosyncratic productivity shocks that hit jobs at random and heterogeneity of workers according to ex ante unobservable abilities. We argue that firms' decisions about reservation productivity can help explain the shape of wage distributions. This is shown from numerical experiments, calibrated to French data, by considering alternative ranges of productivity shocks.
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Suggested Citation

  • Arnaud Chéron & Bénédicte Rouland, 2010. "Endogenous Job Destructions and the Distribution of Wages," TEPP Working Paper 2010-20, TEPP.
  • Handle: RePEc:tep:teppwp:wp10-20
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