The effect of Search Frictions on Wages

Gerard van den Berg and Aico van Vuuren

No 2003-29, Working Papers from Center for Research in Economics and Statistics

Abstract: Labor market theories allowing for search frictions make marked predic-tions on the e ect of the degree of frictions on wages. Often, the e ect ispredicted to be negative. Despite the popularity of these theories, this hasnever been tested. We perform tests with matched worker- rm data. Theworker data are informative on individual wages and labor market transi-tions, and this allows for estimation of the degree of search frictions. The rm data are informative on labor productivity. The matched data pro-vide the skill composition in di erent markets. Together this allows us toinvestigate how the mean di erence between labor productivity and wagesin a market depends on the degree of frictions and other determinants. Wecorrect for worker self-selection into high-wage jobs. Using within-marketvariation, we also investigate the extent of (and explanations for) positiveassortative matching.

Date: 2003
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Citations: View citations in EconPapers (3)

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Related works:
Journal Article: The effect of search frictions on wages (2010)
Working Paper: The Effect of Search Frictions on Wages (2006)
Working Paper: The Effect of Search Frictions on Wages (2003)
Working Paper: The effect of search frictions on wages (2003)
Working Paper: The Effect of Search Frictions on Wages (2003)
Working Paper: The Effect of Search Frictions on Wages (2002)
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