Matching, Sorting, and Wages

Thibaut Lamadon, Costas Meghir, Jean-Marc Robin and Jeremy Lise

No 568, 2018 Meeting Papers from Society for Economic Dynamics

Abstract: This paper the non-parametric identification of models with production complementarities and search frictions. We develop a model with two sided unobserved heterogeneity, mobility costs, on-the-job search and vacancy cre- ation. The mobility cost is borne by the worker. The assumption here is that the worker pays the moving cost and the firm compensates her through a higher wage. Essentially we assume that firms can make wage payments, but not lump sum payments. The mobility cost is introduced to provide a structural source of wage randomness given worker and firm heterogeneity. We develop a constructive proof for the non-parametric identification of the production function from matched employer-employee data. We evaluate the properties of the associated estimator with a Monte-Carlo simulation. We estimate the model on the matched employer-employee data from Sweden to estimate the complementarity between unobserved worker and firm hetero- geneity, decompose the sources of income inequality and quantify the output loss due to search friction

Date: 2018
New Economics Papers: this item is included in nep-dge and nep-ltv
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Citations: View citations in EconPapers (8)

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Related works:
Journal Article: Matching, Sorting and Wages (2016)
Working Paper: Matching, Sorting, and Wages (2016)
Working Paper: Matching, Sorting, and Wages (2016)
Working Paper: Matching, Sorting and Wages (2013)
Working Paper: Matching, Sorting and Wages (2013)
Working Paper: Matching, Sorting and Wages (2009)
Working Paper: Matching, Sorting and Wages (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed018:568

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