Wage Dispersion and Recruiting Selection

Benjamin Villena-Roldan ()

No 529, 2010 Meeting Papers from Society for Economic Dynamics

Abstract: The model also predicts (i) residual wage dispersion of level wages increasing in productivity; (ii) residual wage dispersion of log wages decreasing in productivity; (iii) a negative relation between unemployment and residual wage dispersion and (iv) positive relation between productivity dispersion and residual wage dispersion. To assess these empirical predictions, I calibrate the model to match the mean and variance of the log wages in CPS data 1985-2006. The model's predictions are strongly supported in the data.

Date: 2010
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