Scale effects in markets with search

Barbara Petrongolo and Christopher Pissarides

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Reduced-form tests of scale effects in markets with search, based on aggregate matching functions, may miss important scale effects at the micro level, because of the reactions of job searchers. We estimate a semi-structural model on a British sample of unemployed people, testing for scale effects on the offer arrival rate and the wage offer distribution. We find scale effects in wage offers but not in offer arrival rates. We also find that reservation wages rise to deliver higher post-unemployment wages but not faster matches, so aggregate matching functions are unaffected by scale.

Keywords: Job search; economies of scale; matching; aggregate matching functions; wage offer distribution; unemployment (search for similar items in EconPapers)
JEL-codes: D83 J31 J64 (search for similar items in EconPapers)
Date: 2006-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (39)

Published in The Economic Journal, January, 2006, 116(508), pp. 21-44. ISSN: 0013-0133

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http://eprints.lse.ac.uk/2467/ Open access version. (application/pdf)

Related works:
Journal Article: Scale Effects in Markets with Search (2006)
Working Paper: Scale Effects in Markets with Search (2003)
Working Paper: Scale effects in markets with search (2003)
Working Paper: Scale Effects in Markets with Search (2003)
Working Paper: Scale Effects in Markets with Search (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:2467

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