Technical Appendix for 'Frictional Wage Dispersion in Search Models: A Quantitative Assessment'
17 Pages Posted: 10 Dec 2012
Date Written: September 1, 2006
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.
Keywords: labor market, wage inequality, search frictions, job search
JEL Classification: D83, E24, J31, J41, J63, J64
Suggested Citation: Suggested Citation