Equilibrium Search with Continuous Productivity Dispersion: Theory and Non-Parametric Estimation

Christian Bontemps, Jean-Marc Robin and Gerard van den Berg

No 97-081/3, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: In this paper we theoretically and empirically analyze equilibrium search models of the labor market. The Burdett-Mortensen equilibrium search model is generalized by allowing for continuous distributions of firm productivity types within a given labor market. We characterize equilibrium and derive expressions for the endogenous equilibrium wage distributions. We then characterize the full set of wage (offer) distributions that can in principle be generated by the model. We develop a structural nonparametric estimation method for the productivity distribution. We estimate the model using French longitudinal survey data on labor supply, and we compare the results on the relation between productivities and wages to those obtained using a French panel dataset of firms. The results are informative on the degree to which firms exploit search frictions.

Keywords: Labor market equilibrium; job mobility; wages; productivity; monopsony power (search for similar items in EconPapers)
JEL-codes: C51 D83 J3 J6 (search for similar items in EconPapers)
Date: 1997-08-11, Revised 1998-08-01
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Related works:
Journal Article: Equilibrium Search with Continuous Productivity Dispersion: Theory and Nonparametric Estimation (2000)
Working Paper: Equilibrium Search with Continuous Productivity Dispersion: Theory and Nonparametric Estimation (2000)
Working Paper: Equilibrium search with continuous productivity dispersion: theory and nonparametric estimation (2000)
Working Paper: Equilibrium Search with Continuous Productivity Dispersion: Theory and Non-Parametric Estimation (1998)
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