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Wage distributions and wage dynamics in Europe and the US: lessons from a simple job search model

Gregory Jolivet, Fabien Postel-Vinay () and Jean-Marc Robin ()

Research Unit Working Papers from Laboratoire d'Economie Appliquee, INRA

Abstract: Job search models of the labor market establish a very tight correspondance between the determinants of labor turnover and individual wage dynamics on one hand, and the determinants of wage dispersion on the other. This paper offers a systematic examination of wether this correspondance is present in the data by estimating a rudimentary partial equilibrium job search model on the ECHP database, from which we extract a 1996-1999 panel of individual worker data from 12 different European countries. We find that our basic job search model fits the data surprisingly well. This also allows us to point a number of interesting emprirical regularities about wage distributions. Finally, our results suggest that cross-sectional data on individual wages contain the basic information needed to obtain reliable estimates of the "search frictions" parameters of a canonical job search model.

Keywords: Labor market frictions; wage distribution; wage dynamics; job mobility (search for similar items in EconPapers)
JEL-codes: J64 J31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eec and nep-lab
Date: 2003-03
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