Sorting and the output loss due to search frictions

C. N. Teulings () and Pieter Gautier

No 8257, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We analyze a general search model with on-the-job search and sorting of heterogeneous workers into heterogeneous jobs. This model yields a simple relationship between (i) the unemployment rate, (ii) the value of non-market time, and (iii) the max-mean wage differential. The latter measure of wage dispersion is more robust than measures based on the reservation wage, due to the long left tail of the wage distribution. We estimate this wage differential using data on match quality and allow for measurement error. The estimated wage dispersion and mismatch for the US is consistent with an unemployment rate of 4-6%. We find that without search frictions, output would be between 7.5% and 18.5% higher, depending on whether or not firms can ex ante commit to wage payments.

Keywords: Mismatch; On-the-job search; Sorting; Unemployment (search for similar items in EconPapers)
JEL-codes: E24 J62 J63 J64 (search for similar items in EconPapers)
Date: 2011-02
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
https://cepr.org/publications/DP8257 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Journal Article: SORTING AND THE OUTPUT LOSS DUE TO SEARCH FRICTIONS (2015)
Working Paper: Sorting and the output loss due to search frictions (2012)
Working Paper: Sorting and the output loss due to search frictions (2012)
Working Paper: Sorting and the Output Loss due to Search Frictions (2011)
Working Paper: Sorting and the Output Loss Due to Search Frictions (2011)
Working Paper: Sorting and the output loss due to search frictions (2011)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:8257

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP8257

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().