eprintid: 17132
rev_number: 30
eprint_status: archive
userid: 600
dir: disk0/00/01/71/32
datestamp: 2009-09-07 03:50:57
lastmod: 2015-07-23 09:37:30
status_changed: 2009-09-07 03:50:57
type: article
metadata_visibility: show
creators_name: Postel-Vinay, F.
creators_name: Robin, J.-M.
creators_id: 
creators_id: JMROB32
title: Equilibrium wage dispersion with worker and employer heterogeneity
ispublished: pub
subjects: 12000
divisions: F24
keywords: Labor market frictions, wage dispersion, log wage variance decomposition
note: © Econometric Society, http://www.econometricsociety.org. This paper may be downloaded, printed and reproduced only for personal or classroom use. Absolutely no downloading or copying may be done for, or on behalf of, any for-profit commercial firm or other commercial purpose without the explicit permission of the Econometric Society. For this purpose, contact Claire Sashi, General Manager, at sashi@econometricsociety.org.
abstract: We construct and estimate an equilibrium search model with on–the–job–search. Firms make take–it–or–leave–it wage offers to workers conditional on their characteristics and they can respond to the outside job offers received by their employees. Unobserved worker productive heterogeneity is introduced in the form of cross–worker differences in a "competence" parameter. On the other side of the market, firms also are heterogeneous with respect to their marginal productivity of labor. The model delivers a theory of steady–state wage dispersion driven by heterogenous worker abilities and firm productivities, as well as by matching frictions. The structural model is estimated using matched employer and employee French panel data. The exogenous distributions of worker and firm heterogeneity components are nonparametrically estimated. We use this structural estimation to provide a decomposition of cross–employee wage variance. We find that the share of the cross–sectional wage variance that is explained by person effects varies across skill groups. Specifically, this share lies close to 40% for high–skilled white collars, and quickly decreases to 0% as the observed skill level decreases. The contribution of market imperfections to wage dispersion is typically around 50%.
date: 2002-11
official_url: http://www3.interscience.wiley.com/journal/118940048/abstract
vfaculties: VSHS
oa_status: green
language: eng
primo: open
primo_central: open_green
doi: 10.1111/1468-0262.00377
lyricists_name: Robin, J
lyricists_id: JMROB32
full_text_status: public
publication: Econometrica
volume: 70
number: 6
pagerange: 2295-2350
refereed: TRUE
issn: 0012-9682
citation:        Postel-Vinay, F.;    Robin, J.-M.;      (2002)    Equilibrium wage dispersion with worker and employer heterogeneity.                   Econometrica , 70  (6)   pp. 2295-2350.    10.1111/1468-0262.00377 <https://doi.org/10.1111/1468-0262.00377>.       Green open access   
 
document_url: https://discovery-pp.ucl.ac.uk/id/eprint/17132/1/17132.pdf