Competing Auctions of Skills

John Kennes and Daniel le Maire

CAM Working Papers from University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics

Abstract: The model of competing sellers in McAfee (1993) is applied to a labor market environment with heterogeneous workers, who differ by outside option and skill type, and heterogeneous firms, who differ by the amount of output produced when matched to each possible worker type. We derive both a static and a dynamic version of this model where workers can entertain offers while employed and unemployed. A simple estimated benchmark version of the dynamic model gives a reasonable approximation of the statistical moments of both the aggregate wage and productivity distributions in Denmark. We also use the simple benchmark model to explore further implications of the theory. For example, we find that observed inter-temporal changes in the overall distribution of wages are not predicted by a simple model of no-comparative advantage.

Keywords: Competing auctions; on-the-job search; heterogeneous firms; skills; supermodularity; non-degenerate job offer distribution (search for similar items in EconPapers)
JEL-codes: E32 J63 J64 (search for similar items in EconPapers)
Pages: 55 pages
Date: 2013-12-31
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Related works:
Working Paper: Competing Auctions of Skills (2016)
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