Technical appendix for \\"Frictional wage dispersion in search models: a quantitative assessment\\"
In this Technical Appendix to Hornstein, Krusell, and Violante (2006) (HKV, 2006, hereafter) we provide a detailed characterization of the search model with (1) wage shocks during employment and (2) on-the-job search outlined in Sections 6 and 7 of that paper, and we derive all of the results that are only stated in HKV (2006). In particular, we derive the expressions for our preferred measure of frictional wage inequality: the ratio of average wages to the reservation wage, or, the `mean-min' wage ratio.
Working hard in the wrong place: a mismatch-based explanation to the UK productivity puzzle
The UK experienced an unusually prolonged stagnation in labor productivity in the aftermath of the Great Recession. This paper analyzes the role of sectoral labor misallocation in accounting for this ?productivity puzzle.? If jobseekers disproportionately search for jobs in sectors where productivity is relatively low, hires are concentrated in the wrong sectors and the post-recession recovery in aggregate productivity can be slow. Our calculations suggest that, quantified at the level of three-digit occupations, this mechanism can explain up to two-thirds of the deviations from trend-growth ...
The Rise of US Earnings Inequality: Does the Cycle Drive the Trend?
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The effects of technical change on labor market inequalities
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Frictional wage dispersion in search models: a quantitative assessment
Standard search and matching models of equilibrium unemployment, once properly calibrated, can generate only a small amount of frictional wage dispersion, i.e., wage differentials among ex-ante similar workers induced purely by search frictions. We derive this result for a specific measure of wage dispersion|the ratio between the average wage and the lowest (reservation) wage paid. We show that in a large class of search and matching models this statistic (the mean-min ratio") can be obtained in closed form as a function of observable variables (i.e., interest rate, value of leisure, and ...
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Optimal Progressivity with Age-Dependent Taxation
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Joint-search theory: new opportunities and new frictions
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