The Effect of Search Frictions on Wages

Arbeitspapier

Labor market theories allowing for search frictions make marked predictions on the effect of the degree of frictions on wages. Often, the effect is predicted to be negative. Despite the popularity of these theories, this has never been tested. We perform tests with matched worker-firm data. The worker data are informative on individual wages and labor market transitions, and this allows for estimation of the degree of search frictions. The firm data are informative on labor productivity. The matched data provide the skill composition in different markets. Together this allows us to investigate how the mean difference between labor productivity and wages in a market depends on the degree of frictions and other determinants. We correct for worker self-selection into high-wage jobs. Using within-market variation, we also investigate the extent of (and explanations for) positive assortative matching.

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• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: IZA Discussion Papers ; No. 805

Klassifikation und Themen

• Klassifikation: Wirtschaft
• Thema: labor market imperfections ; job durations ; productivity ; heterogeneity ; sorting ; assortative matching ; Lohn ; Arbeitsplatzsuchmodell ; Friktionelle Arbeitslosigkeit ; Schätzung ; Theorie ; Dänemark

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): van den Berg, Gerard J. ; van Vuuren, Aico
• Ereignis: Veröffentlichung
• (wer): Institute for the Study of Labor (IZA)
• (wo): Bonn
• (wann): 2003

Weitere Informationen

• Handle: http://hdl.handle.net/10419/20050