Structural Models of Wage and Employment Dynamics

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Henning Bunzel, Bent Christensen, George R. Neumann, Jean-Marc Robin
Emerald Group Publishing Limited, Mar 30, 2006 - Business & Economics - 587 pages
Of Conference Papers / Dale T. Mortensen 3 -- II Theory Papers -- Chapter 1 Bargaining, On-the-Job Search and Labor Market Equilibrium / Ken Burdett, Roberto Bonilla 15 -- 2 The model 18 -- 2.1 Firms 19 -- 2.2 Workers 19 -- 3 Bargaining 22 -- 4 Market equilibria 26 -- 4.1 Market Equilibrium with On-the-Job Search 28 -- 4.2 Market equilibrium with no on-the-job search 30 -- Appendix Proof of Proposition 5 34 -- Chapter 2 On-the-Job Search and Strategic Bargaining / Robert Shimer 37 -- 2 Model 40 -- 2.1 Preferences and technology 40 -- 2.2 Wage bargaining and equilibrium concept 41 -- 2.3 Nonconvexity of the set of feasible payoffs 43 -- 3 Market Equilibria with Wage Dispersion 44 -- 3.1 Bellman values 44 -- 3.2 Subgame perfect equilibria of the bargaining game 45 -- 3.3 Other market equilibria 46 -- 3.4 Wage lotteries 48 -- 4 Degenerate Market Equilibria 49 -- 4.1 Single wage market equilibrium 49 -- 4.2 Many-wage market equilibria 50 -- 5 Heterogeneous Firms 52 -- 5.1 Definition of equilibrium 52 -- 5.2 Testable implications 54 -- 5.3 Comparison with Burlett and Mortensen (1998) 55 -- Chapter 3 Alternative Theories of Wage Dispersion / Damien Gaumont, Martin Schindler, Randall Wright 61 -- 2 Ex Ante heterogeneity 64 -- 2.1 A simple model 64 -- 2.2 Alternative assumptions 69 -- 3 Ex post heterogeneity 71 -- 3.1 Permanent shocks 71 -- 3.2 The law of two wages 73 -- 4 Other models 75 -- 4.1 Transitory shocks 75 -- 4.2 A crime model 77 -- 5 Ex ante and ex post combined 79 -- Chapter 4 Wage Differentials, Discrimination and Efficiency / Shouyong Shi 83 -- 2 The model 87 -- 2.1 Workers and firms 87 -- 2.2 A candidate equilibrium 89 -- 3 The candidate is the unique equilibrium 91 -- 3.1 Separation is not an equilibrium 92 -- 3.2 Firms rank the two types of workers strictly 94 -- 3.3 High-productivity workers have the priority 95 -- 4 Properties of the equilibrium and the social optimum 97 -- 5 Extension to many types of workers 100 -- 5.1 The equilibrium and its properties 100 -- 5.2 Numerical examples 104 -- Appendix A Proof of Proposition 3 109 -- Appendix B Proof of Proposition 4 111 -- Chapter 5 Labor Market Search with Two-Sided Heterogeneity: Hierarchical Versus Circular Models / Pieter A. Gautier, Coen N. Teulings, Aico van Vuuren 117 -- 2 The circular job search model 121 -- 2.1 Production 121 -- 2.2 Labor supply 122 -- 2.3 Labor demand 122 -- 2.4 Job search technology 122 -- 2.5 Wage setting 123 -- 2.6 Free entry condition 123 -- 3 Equilibrium conditions 123 -- 4 Characterization of the equilibrium 125 -- 5 The cost of search 126 -- Chapter 6 The Weak Pareto Law in Burdett-Mortensen Equilibrium Search Models / Gerard J. van den Berg 133 -- 2 Model framework 134 -- 2.1 The Burdett-Mortensen equilibrium search model with heterogeneous productivity across firms 134 -- 2.2 Remuneration of firm owners 137 -- 3 The right-hand tail of the income distribution 138 -- 3.1 Finite maximum wage 138 -- 3.2 Tail weight indicators 138 -- 3.3 Mandelbrot's weak pareto law 140 -- Appendix Proof of Proposition 1 143 -- Chapter 7 Competitive Auctions: Theory and Application / John Kennes 145 -- 2 Competitive auctions 149 -- 2.1 The model 149 -- 2.2 The bidding game 149 -- 2.3 Buyers choice of seller to bid for 150 -- 2.4 Sellers' reserve price choice 150 -- 2.5 A large market 151 -- 3 Dynamics 151 -- 3.1 The model 151 -- 3.2 Equilibrium 153 -- 4 The mortensen rule 153 -- 4.1 Efficient entry 153 -- 4.2 Efficient technology dispersion 155 -- 4.3 Efficient job creation 156 -- 5 On-the-job search 156 -- 5.1 The model 156 -- 5.2 Equilibrium 158 -- 6 What makes a seller? 158 -- 7 Wages 159 -- 8 Price posting 160 -- 9 Imperfect information 161 -- 9.1 The model 161 -- 10 Further applications 163 -- Chapter 8 Block Assignments / Michael Sattinger 169 -- 2 Model 171 -- 3 Optimal dividing values 173 -- 4 Worker and employer behavior 174 -- Chapter 9 Social Security and Intergenerational Redistribution / Joydeep Bhattacharya, Robert R. Reed 183 -- 2 The model 186 -- 2.1 Environment 186 -- 2.3 The labor market 188 -- 2.4 Costs 189 -- 2.5 Specification of labor market policies 190 -- 2.6 Workers' payoffs 191 -- 2.7 Payoffs to firms 192 -- 2.8 Matching 192 -- 3 Bargaining and wage determination 193 -- 3.1 Wage functions 193 -- 3.2 Discussion of the wage function for the young 194 -- 4 Equilibrium 196 -- 4.1 Definition and existence 196 -- 4.2 Labor market participation conditions 196 -- 4.3 Equilibrium entry condition 198 -- 4.4 Partial equilibrium effects of increasing the generosity of benefits 199 -- 5 The absence of policy 201 -- 6 Are pension programs welfare enhancing? 203 -- Appendix A Proof of Lemma 1 210 -- Appendix B Proof of Lemma 2 210 -- Appendix C Proof of Lemma 3 211 -- Appendix D Proof of Lemma 4 212 -- Appendix E Proof of Proposition 5 213 -- III Microeconometric Papers -- Chapter 10 The Job Ladder / Audra J. Bowlus, George R. Neumann 217 -- 2 Earnings growth in U.S. census data 219 -- 3 The Burdett-Mortensen equilibrium search model 220 -- 4 Data description 221 -- 5 Fitting the earnings distribution 10 years in the future 222 -- 6 Downward wage mobility 227 -- Chapter 11 Heterogeneity in Firms' Wages and Mobility Policies / J.M. Abowd, F. Kramarz, S. Roux 237 -- 2 A simple theory of wages, productivity, and mobility 239 -- 3 A general set of wage and mobility equations 244 -- 3.1 Starting-wage equation 244 -- 3.2 The firm-specific model for wages and mobility 246 -- 4 Data description 248 -- 4.1 The DADS 248 -- 5 Estimation results 249 -- 5.1 Starting wages 249 -- 5.2 The firm-specific wage and mobility equations 249 -- Appendix A The likelihood function for the firm-specific model of wages and mobility 263 -- Appendix B Starting-wage equation estimates 266 -- Appendix C Estimation of the corrected covariance matrix 266 -- Chapter 12 The Empirical Content of the Job Search Model: Labor Mobility and Wage Distributions in Europe and the U.S. / Gregory Jolivet, Fabien Postel-Vinay, Jean-Marc Robin 269 -- 2 Facts about worker turnover and wages 271 -- 2.1 A brief description of the sample 272 -- 2.2 Worker turnover 273 -- 2.3 Wages 276 -- 3 A simple model of worker turnover 278 -- 3.1 The environment 278 -- 3.2 Individual labor market transitions 280 -- 3.3 Stationary worker flows and stocks 281 -- 4 Structural estimation 283 -- 4.1 Estimation procedure 283 -- 4.2 Results 285 -- 5 Fit 288 -- 5.1 Transitions across employment states 288 -- 5.2 Job durations 291 -- 5.3 The sampling distributions of wage offers 293 -- 5.4 Wage mobility 296 -- 6 Identification and specification analysis 296 -- 6.1 Inference from transition data 297 -- 6.2 Inference from both transition and duration data 298 -- 6.3 Inference from cross-sectional wage data 300 -- 6.4 Inference from wage mobility 302 -- Appendix Data 306 -- Chapter 13 Job Changes and Wage Growth over the Careers of Private Sector Workers in Denmark / Paul Bingley, Niels Westergaard-Nielsen 309 -- 1 Motivation 310 -- 2 The literature 311 -- 3 The descriptive model 313 -- 4 Data 315 -- 5 Estimation 321 -- Chapter 14 Identification and Inference in Dynamic Programming Models / Bent J. Christensen, Nicholas M. Kiefer 331 -- 2 Dynamic programming: the marketing example 334 -- 3 Discrete states and controls 335 -- 4 Identification: a preview 337 -- 5 Likelihood functions 339 -- 6 Measurement error 346 -- 7 Imperfect control 350 -- 8 Random utility models 354 -- 9 A continuously distributed Utility shock 356 -- 10 Continuous state and optimal stopping: the search Model 358 -- Chapter 15 On Estimation of a Two-Sided Matching Model / Linda Y. Wong 365 -- 2 The model 367 -- 3 Data 368 -- 4 Estimation strategy 370 -- 4.1 Specification 370 -- 4.2 The likelihood function and solution method 372 -- 5 Results 374 -- 5.1 A low interest rate 374 -- 5.2 A high interest rate 374 -- 5.3 Subsamples 375 -- 5.4 Characteristics of the baseline model 375 -- 5.5 Regime 1 376 -- 5.6 Regime 2 379 -- Chapter 16 A Structural Nonstationary Model of Job Search: Stigmatization of the Unemployed by Job Offers or Wage Offers? / Stefan Lollivier, Laurence Rioux 381 -- 2 The data 385 -- 3 The empirical implementation of a structural nonstationary job search model 389 -- 3.1 The model 389 -- 3.2 Parameterization 392 -- 3.3 Likelihood of the sample 393 -- 4 Results 397 -- 5 Simulation of different economic policy changes 405 -- 5.1 Reform A: 14% increase in insurance benefits, keeping unchanged the declining time sequence 405 -- 5.2 Reform B: The replacement of the declining time sequence of UI benefits by a constant sequence 407 -- 5.3 Reform C: The reform B combined with the imposition of punitive sanctions if two job offers are refused 409 -- 5.4 Reform D: A 3-month increase in the duration of UI entitlement 410 -- Chapter 17 Can Rent Sharing Explain the Belgian Gender Wage Gap? / Francois Rycx, Ilan Tojerow 413 -- 2 Theoretical framework 416 -- 3 Description of the data 418 -- 4 Empirical analysis 419 -- 4.1 Benchmark specification 420 -- 4.2 Group effects 422 -- 4.3 Individual and firm characteristics 422 -- 4.4 Industry wage differentials 423 -- 4.5 Endogeneity of profits 424 -- 4.6 Rent sharing for men and women 425.

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