Measuring Productivity Differences in Equilibrium Search Models
This paper studies estimation of the number and location of modes of the wage distribution. The location of the modes can be used to estimate the cutpoints of the equilibrium wage distribution (Bowlus, Kiefer, and Neumann, 1995) in the presence of measurement error. These cutpoints can be used to classify workers into productivity classes; Company wage data can be used to examine how well the classification method works. We illustrate its use with wage and employment data from the Danish IDA data, a longitudinal dataset containing information about all workers in a 5% sample of firms from 1980-1991.
|Date of creation:||20 Jun 1996|
|Date of revision:|
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- Koning, Pierre & Ridder, Geert & van den Berg, Gerard J, 1995. "Structural and Frictional Unemployment in an Equilibrium Search Model with Heterogeneous Agents," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 10(S), pages S133-51, Suppl. De.
- Albrecht, James W & Axell, Bo, 1983.
"An Equilibrium Model of Search Unemployment,"
Working Paper Series
99, Research Institute of Industrial Economics.
- Bowlus, Audra J & Kiefer, Nicholas M & Neumann, George R, 1995. "Estimation of Equilibrium Wage Distributions with Heterogeneity," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 10(S), pages S119-31, Suppl. De.
- Burdett, Kenneth & Mortensen, Dale T, 1998. "Wage Differentials, Employer Size, and Unemployment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(2), pages 257-73, May.
- Fischer, N. I. & Mammen, E. & Marron, J. S., 1994. "Testing for multimodality," Computational Statistics & Data Analysis, Elsevier, vol. 18(5), pages 499-512, December.
- Dale T. Mortensen, 1988. "Equilibrium Wage Distrihutions: A Synthesis," Discussion Papers 811, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
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