Discussion Paper Details
Please find the details for DP3861 in an easy to copy and paste format below:
Title: How Large are Search Frictions?
Author(s): Pieter A. Gautier and Coen N Teulings
Publication Date: April 2003
Keyword(s): assignment, search and wages
Programme Area(s): Labour Economics
Abstract: This Paper presents strong evidence for the concavity of wages in job and worker characteristics by adding second order terms to a Mincerian earnings function for six OECD countries. Under a standard normality assumption, this concavity cannot be attributed to unobserved components in those characteristics. An assignment model with search frictions provides a parsimonious explanation for our findings. This model yields two restrictions on the coefficients, which fit the data very well. The impact of search frictions on wages is large. Our results relate to the literature on industry wage differentials, on structural identification in hedonic models, and on wage posting versus Nash bargaining in search models.
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Gautier, P and Teulings, C. 2003. 'How Large are Search Frictions?'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=3861