The Effect of Search Frictions on WagesGerard J. van den Berg and Aico van Vuuren () No C1-2, 10th International Conference on Panel Data, Berlin, July 5-6, 2002 from International Conferences on Panel Data Abstract: Labor market theories that allow 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. We effectively compare different markets with different degrees of frictions and different market outcomes. 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 allow for an assessment of 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. Using within-market variation, we also investigate the extent of (and explanations for) positive assortative matching. We perform separate analyses for The Netherlands and Denmark. Keywords: labor market imperfections; job durations; productivity; heterogeneity; sorting; assortative matching (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: http://EconPapers.repec.org/RePEc:cpd:pd2002:c1-2 Access Statistics for this paper More papers in 10th International Conference on Panel Data, Berlin, July 5-6, 2002 from International Conferences on Panel Data |
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