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Endogenous On-the-job Search and Frictional Wage Dispersion

Hertweck, Matthias S.. (2010) Endogenous On-the-job Search and Frictional Wage Dispersion. WWZ Discussion Papers, 2010 (02).

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Abstract

This paper addresses the large degree of frictional wage dispersion in US data. The standard job matching model without on-the-job search cannot replicate this pattern. With on-the-job search, however, unemployed job searchers are more willing to accept low wage offers since they can continue to seek for better employment opportunities. This explains why observably identical workers may be paid very differently. Therefore, we examine the quantitative implications of on-the-job search in a stochastic job matching model. Our key result is that the inclusion of variable on-the-job search increases the degree of frictional wage dispersion by an order of a magnitude.
Faculties and Departments:06 Faculty of Business and Economics > Departement Wirtschaftswissenschaften
06 Faculty of Business and Economics > Departement Wirtschaftswissenschaften > Professuren Wirtschaftswissenschaften > Wirtschaftstheorie (Berentsen)
12 Special Collections > WWZ Publications > WWZ Discussion Papers and Working Papers
UniBasel Contributors:Hertweck, Matthias S
Item Type:Working Paper
Publisher:WWZ, University of Basel
Number of Pages:31
Note:Publication type according to Uni Basel Research Database: Discussion paper / Internet publication
Language:English
Identification Number:
  • handle: RePEc:bsl:wpaper:2010/02
Last Modified:16 Mar 2018 15:07
Deposited On:08 Mar 2018 11:52

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