The Value of Leisure or Disutility of Work: Wage Dispersion in a Model of Search with Endogenous Effort

Masters, Adrian

doi:10.2139/ssrn.2046732

Abstract

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The Value of Leisure or Disutility of Work: Wage Dispersion in a Model of Search with Endogenous Effort

Adrian Masters

State University of New York at Albany - College of Arts and Sciences, Economics

January 3, 2012

Abstract:
Wage dispersion is generated in a sequential search environment through heterogeneity in firm productivity along with an individual wage-effort trade-off. For a given degree of TFP dispersion, the framework can generate any amount of wage dispersion. Calibrated to generate realistic gains from trade, it is able to generate the kind of wage dispersion observed in data.

Number of Pages in PDF File: 33

Keywords: Wage dispersion, search

JEL Classification: E24, J64

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Date posted: April 26, 2012

Suggested Citation

Masters, Adrian, The Value of Leisure or Disutility of Work: Wage Dispersion in a Model of Search with Endogenous Effort (January 3, 2012). Available at SSRN: http://ssrn.com/abstract=2046732 or http://dx.doi.org/10.2139/ssrn.2046732

Contact Information

Adrian Masters (Contact Author)

State University of New York at Albany - College of Arts and Sciences, Economics ( email )

1400 Washington Avenue
Albany, NY 12222
United States