How Large are Search Frictions?
Pieter Gautier () and
Coen N. Teulings ()
Additional contact information
Coen N. Teulings: University of Amsterdam
No 03-026/3, Tinbergen Institute Discussion Papers from Tinbergen Institute
This paper shows that we can normalize job and worker characteristics so that, without frictions,there exists a linear relationship between wages on the one hand and worker and job type indiceson the other. However, for five European countries and the United States we find strong evidencefor a systematic concave relationship. An assignment model with search frictions provides aparsimonious explanation for our findings. This model yields two restrictions on the coefficientsthat fit the data well. Allowing for unobserved heterogeneity and measurement error, we findthat reservation wages are 25% lower than they would be in a frictionless world. Our resultsrelate to the literature on industry wage differentials and on structural identification in hedonicmodels. See publication in the Journal of the European Economic Association , 2006, 4(6), 1193-1225.
Keywords: wages; search; assignment. (search for similar items in EconPapers)
JEL-codes: J21 J30 J60 J23 (search for similar items in EconPapers)
Date: 2003-03-27, Revised 2005-08-22
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
Journal Article: How Large are Search Frictions? (2006)
Working Paper: How Large are Search Frictions? (2005)
Working Paper: How Large are Search Frictions (2005)
Working Paper: How Large are Search Frictions? (2003)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:tin:wpaper:20030026
Access Statistics for this paper
More papers in Tinbergen Institute Discussion Papers from Tinbergen Institute Contact information at EDIRC.
Bibliographic data for series maintained by Tinbergen Office +31 (0)10-4088900 ().