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Equilibrium Search with Continuous Productivity Dispersion: Theory and Nonparametric Estimation[Note 1. A preliminary version of this article was distributed among ...]
Author(s) -
Bontemps Christian,
Robin JeanMarc,
Van Den Berg Gerard J.
Publication year - 2000
Publication title -
international economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.658
H-Index - 86
eISSN - 1468-2354
pISSN - 0020-6598
DOI - 10.1111/1468-2354.00066
Subject(s) - nonparametric statistics , productivity , econometrics , wage dispersion , structural estimation , economics , distribution (mathematics) , panel data , exploit , estimation , wage , general equilibrium theory , set (abstract data type) , dispersion (optics) , mathematics , computer science , microeconomics , efficiency wage , labour economics , macroeconomics , mathematical analysis , physics , computer security , management , optics , programming language
In this article we develop an equilibrium search model with a continuous distribution of firm productivity types within a given labor market. We characterize equilibrium, derive expressions for the endogenous equilibrium wage distributions, and characterize the set of wage distributions that can be generated by the model. We develop a structural nonparametric estimation method for the productivity distribution. We estimate the model using French longitudinal survey data on labor supply, and we compare the results with those from a French panel data set of firms. The results are informative on the degree to which firms exploit search frictions.