Job Search, Bargaining, and Wage Dynamics

Shintaro Yamaguchi

Journal of Labor Economics, 2010, vol. 28, issue 3, 595-631

Abstract: This article constructs and estimates a model of wage bargaining with on-the-job search to explore three different components of wages: general human capital, match-specific capital, and outside options. As the workers find better job opportunities, the current employer has to compete with outside firms to retain them. This between-firm competition results in wage growth even when productivity remains the same. The model is estimated by a simulated minimum distance estimator and data from the 1979 National Longitudinal Study of Youth. The results indicate that the improved value of the outside option raises wages by 14%-16% in the first 5 years. (c) 2010 by The University of Chicago.

Date: 2010
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Working Paper: Job Search, Bargaining, and Wage Dynamics (2009)
Working Paper: Job Search, Bargaining, and Wage Dynamics (2007)
Working Paper: Job Search, Bargaining, and Wage Dynamics (2006)
Working Paper: Job Search, Bargaining, and Wage Dynamics (2006)
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