Department of Economics and Business Economics

An Empirical Model of Wage Dispersion with Sorting

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An Empirical Model of Wage Dispersion with Sorting. / Bagger, Jesper; Lentz, Rasmus.

In: Review of Economic Studies, Vol. 86, No. 1, 2019, p. 153-190.

Research output: Contribution to journal/Conference contribution in journal/Contribution to newspaperJournal articleResearchpeer-review

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Bagger, J & Lentz, R 2019, 'An Empirical Model of Wage Dispersion with Sorting', Review of Economic Studies, vol. 86, no. 1, pp. 153-190. https://doi.org/10.1093/restud/rdy022

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Bagger, Jesper ; Lentz, Rasmus. / An Empirical Model of Wage Dispersion with Sorting. In: Review of Economic Studies. 2019 ; Vol. 86, No. 1. pp. 153-190.

Bibtex

@article{063d34acb27c4029b7f7dfab0072fa67,
title = "An Empirical Model of Wage Dispersion with Sorting",
abstract = "We estimate an equilibrium on-the-job search model with endogenous search intensity. Workers differ by skill, firms by productivity. Workers respond to mismatch by intensive search, and sorting may result from complementarities in the match-level production function. The model is estimated on Danish-matched employer-employee data. Firms are ranked through revealed preference by the fraction of hires that is poached from other firms: the poaching rank. Identification is obtained by firm rank conditional mobility and wage patterns. Wage variation is decomposed into four sources: sorting (40%), worker heterogeneity (32%), firm heterogeneity (18%), and frictional competition (10%). A social planner can improve output net of search cost by 1.5% relative to the decentralized solution.",
keywords = "Firm heterogeneity, Matched employer-employee data, Mismatch, On-the-job search, Search intensity, Sorting, Wage dispersion, Worker heterogeneity",
author = "Jesper Bagger and Rasmus Lentz",
year = "2019",
doi = "10.1093/restud/rdy022",
language = "English",
volume = "86",
pages = "153--190",
journal = "The Review of Economic Studies",
issn = "0034-6527",
publisher = "Oxford University Press",
number = "1",

}

RIS

TY - JOUR

T1 - An Empirical Model of Wage Dispersion with Sorting

AU - Bagger, Jesper

AU - Lentz, Rasmus

PY - 2019

Y1 - 2019

N2 - We estimate an equilibrium on-the-job search model with endogenous search intensity. Workers differ by skill, firms by productivity. Workers respond to mismatch by intensive search, and sorting may result from complementarities in the match-level production function. The model is estimated on Danish-matched employer-employee data. Firms are ranked through revealed preference by the fraction of hires that is poached from other firms: the poaching rank. Identification is obtained by firm rank conditional mobility and wage patterns. Wage variation is decomposed into four sources: sorting (40%), worker heterogeneity (32%), firm heterogeneity (18%), and frictional competition (10%). A social planner can improve output net of search cost by 1.5% relative to the decentralized solution.

AB - We estimate an equilibrium on-the-job search model with endogenous search intensity. Workers differ by skill, firms by productivity. Workers respond to mismatch by intensive search, and sorting may result from complementarities in the match-level production function. The model is estimated on Danish-matched employer-employee data. Firms are ranked through revealed preference by the fraction of hires that is poached from other firms: the poaching rank. Identification is obtained by firm rank conditional mobility and wage patterns. Wage variation is decomposed into four sources: sorting (40%), worker heterogeneity (32%), firm heterogeneity (18%), and frictional competition (10%). A social planner can improve output net of search cost by 1.5% relative to the decentralized solution.

KW - Firm heterogeneity

KW - Matched employer-employee data

KW - Mismatch

KW - On-the-job search

KW - Search intensity

KW - Sorting

KW - Wage dispersion

KW - Worker heterogeneity

UR - http://www.scopus.com/inward/record.url?scp=85060351260&partnerID=8YFLogxK

U2 - 10.1093/restud/rdy022

DO - 10.1093/restud/rdy022

M3 - Journal article

AN - SCOPUS:85060351260

VL - 86

SP - 153

EP - 190

JO - The Review of Economic Studies

JF - The Review of Economic Studies

SN - 0034-6527

IS - 1

ER -