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The effect of search frictions on wages
Uppsala University, Units outside the University, Office of Labour Market Policy Evaluation.
2010 (English)In: Labour Economics, ISSN 0927-5371, Vol. 17, no 6, 875-885 p.Article in journal (Refereed) Published
Abstract [en]

We aim to test whether the degree of informational search frictions in the labor market has a negative effect on wages. In a range of equilibrium search models of the labor market, this effect is predicted to be negative. Nevertheless, 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. 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, and to assess the quantitative relevance of frictions for wages.

Place, publisher, year, edition, pages
2010. Vol. 17, no 6, 875-885 p.
Keyword [en]
Labor market imperfections, Job durations, Productivity, Heterogeneity
National Category
Economics and Business
URN: urn:nbn:se:uu:diva-147095DOI: 10.1016/j.labeco.2010.08.001ISI: 000285130700001OAI: oai:DiVA.org:uu-147095DiVA: diva2:399973
Available from: 2011-02-24 Created: 2011-02-24 Last updated: 2011-02-24Bibliographically approved

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