This setting lets you change the way you view articles. You can choose to have articles open in a dialog window, a new tab, or directly in the same window.
Open in Dialog
Open in New Tab
Open in same window
Open in New Tab
Open in same window
American Economic Review: Vol. 101 No. 7 (December 2011)
AER Volume. 101, Issue 7 | 
Previous ArticleNext Article
Sign up for Email Alerts Follow us on Twitter
AER Forthcoming Articles
Full-text Article
Online Appendix (171.17 KB)
Previous ArticleNext Article
Expand
Quick Tools:
Print Article Summary Email Link to this Article Export CitationSign up for Email Alerts Follow us on Twitter
Explore:
AER Forthcoming Articles
Frictional Wage Dispersion in Search Models: A Quantitative Assessment
Article Citation
Hornstein, Andreas,
Per Krusell, and
Giovanni L. Violante. 2011. "Frictional Wage Dispersion in Search Models: A Quantitative Assessment."
American Economic Review,
101(7): 2873-98.
DOI: 10.1257/aer.101.7.2873
DOI: 10.1257/aer.101.7.2873
Abstract
We propose a new measure of frictional wage dispersion: the mean-min wage ratio. For a large class of search models, we show that this measure is independent of the wage-offer distribution but depends on statistics of labor-market turnover and on preferences. Under plausible preference parameterizations, observed magnitudes for worker flows imply that in the basic search model, and in most of its extensions, frictional wage dispersion is very small. Notable exceptions are some of the most recent models of on-the-job search. Our new measure allows us to rationalize the diverse empirical findings in the large literature estimating structural search models. (JEL D81, D83, J31, J41, J64)
Article Full-Text Access
Full-text Article
Additional Materials
Online Appendix (171.17 KB)
Authors
Hornstein, Andreas (Reserve Bank of Richmond)
Krusell, Per (Institute for International Economic Studies, Stockholm U)
Violante, Giovanni L. (NYU)
Krusell, Per (Institute for International Economic Studies, Stockholm U)
Violante, Giovanni L. (NYU)
JEL Classifications
D81: Criteria for Decision-Making under Risk and Uncertainty
D83: Search; Learning; Information and Knowledge; Communication; Belief
J31: Wage Level and Structure; Wage Differentials
J41: Labor Contracts
J64: Unemployment: Models, Duration, Incidence, and Job Search
D83: Search; Learning; Information and Knowledge; Communication; Belief
J31: Wage Level and Structure; Wage Differentials
J41: Labor Contracts
J64: Unemployment: Models, Duration, Incidence, and Job Search
