Search, layoffs and reservation wages when job offers follow a stochastic process

Svetlana Boyarchenko

Macroeconomics from University Library of Munich, Germany

Abstract: Despite the fact that the empirical data indicate the presence of non- stationarity in wage offer distributions, the majority of job-search models are stationary. We model logs of wage offers as a Markov process with i.i.d. increments and solve two typical job-search models for reservation wages, value functions and expected individual duration of unemployment. All solutions are in the closed form and admit interpretation in terms of expected present values of certain streams of payoffs.

Keywords: reservation wage; supremum process; Wiener-Hopf factorization (search for similar items in EconPapers)
JEL-codes: E (search for similar items in EconPapers)
Pages: 29 pages
Date: 2004-09-17
Note: Type of Document - pdf; pages: 29
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpma:0409014

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