The effect of search frictions on wages
2010 (English)In: Labour Economics, ISSN 0927-5371, Vol. 17, no 6, 875-885 p.Article in journal (Refereed) Published
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.
Labor market imperfections, Job durations, Productivity, Heterogeneity
Economics and Business
IdentifiersURN: urn:nbn:se:uu:diva-147095DOI: 10.1016/j.labeco.2010.08.001ISI: 000285130700001OAI: oai:DiVA.org:uu-147095DiVA: diva2:399973