Discussion Paper Details

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Title: Wages and the Size of Firms in Dynamic Matching Models

Author(s): Giuseppe Bertola and Pietro Garibaldi

Publication Date: October 2000

Keyword(s): Firm Size Distribution, Recruiting and Wage Dispersion

Programme Area(s): Labour Economics

Abstract: This paper studies the joint distribution of wages and employment levels in simple matching models of job creation and destruction with costly search and firm-specific labour demand shocks. Existing evidence on the relationship between employer size, the mean and variance of employees' wages, and the character of gross job creation and destruction by continuing firms are broadly consistent with decreasing returns in firm-level production and hiring technologies.

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Bibliographic Reference

Bertola, G and Garibaldi, P. 2000. 'Wages and the Size of Firms in Dynamic Matching Models'. London, Centre for Economic Policy Research.