On the Dynamics of unemployment and wage Distributions
Jean-Marc Robin
SciencePo Working papers Main from HAL
Abstract:
Postel-Vinay and Robin's (2002) sequential auction model is extended to allow for aggregate productivity shocks. Workers exhibit permanent differences in ability while firms are identical. Negative aggregate productivity shocks induce job destruction by driving the surplus of matches with low ability workers to negative values. Endogenous job destruction coupled with worker heterogeneity thus provides a mechanism for amplifying productivity shocks that offers an original solution to the unemployment volatility puzzle (Shimer (2005)). Moreover, positive or negative shocks may lead employers and employees to renegotiate low wages up and high wages down when agents' individual surpluses become negative. The model delivers rich business cycle dynamics of wage distributions and explains why both low wages and high wages are more procyclical than wages in the middle of the distribution.
Keywords: Unemployment dynamics; wage distribution; inequality; search-matching (search for similar items in EconPapers)
Date: 2011-09
Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-01024463
References: Add references at CitEc
Citations: View citations in EconPapers (8)
Published in Econometrica, 2011, 79 (5), pp.1327-1355
Downloads: (external link)
https://sciencespo.hal.science/hal-01024463/document (application/pdf)
Related works:
Journal Article: On the Dynamics of Unemployment and Wage Distributions (2011) 
Working Paper: On the Dynamics of unemployment and wage Distributions (2011) 
Working Paper: On the Dynamics of Unemployment and Wage Distributions (2010)
Working Paper: On the dynamics of unemployment and wage distributions (2010) 
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:hal:spmain:hal-01024463
Access Statistics for this paper
More papers in SciencePo Working papers Main from HAL
Bibliographic data for series maintained by Contact - Sciences Po Departement of Economics ().