 Explaining labor wedge trends: An equilibrium search approachCoralia Azucena Quintero Rojas and Francois Langot European Journal of Comparative Economics, 2016, vol. 13, issue 1, 3-35 Abstract: In this paper, we present a search and matching model of the labor market and use this as a device to explain the long-run variation in the aggregate hours worked in several OECD countries over the period 1980-2013. The model distinguishes between hours worked per employee (intensive margin) and the employment rate (extensive margin) and includes a tax/benefit system. This allows us to assess the impact of the observed time-varying heterogeneity of taxes, unemployment benefits, and workers’ bargaining power on the two margins. Our method is based on an accounting procedure. Once it has been calibrated, we find that, for the ten countries of the sample, our search economy is able to explain the patterns of the two margins of aggregate hours worked over the 1980-2013 period, when it includes the cross-country heterogeneity of the labor market institutions. Keywords: Aggregate hours of work; intensive and extensive margins; labor market institutions; labor wedge; matching model (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:liu:liucej:v:13:y:2016:i:1:p:3-35 Access Statistics for this article European Journal of Comparative Economics is currently edited by Matteo Migheli, Giovanni Ramello, Koji Domon, Peter Grajzl, David M. Kemme, Marcello Signorelli and Richard Watt More articles in European Journal of Comparative Economics from Cattaneo University (LIUC) Contact information at EDIRC. |
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