Using Firm Data to Assess the Performance of Equilibrium Search Models of the Labor Market

Tinbergen Institute Discussion Paper

32 Pages Posted: 2 Aug 2000

See all articles by Aico van Vuuren

Aico van Vuuren

Erasmus University Rotterdam (EUR) - Department of Economics

Gerard J. van den Berg

VU University Amsterdam - Department of Economics; Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics; Tinbergen Institute

Date Written: June 2000

Abstract

Equilibrium search models are useful tools for the evaluation of labor market policies. Recently developed equilibrium search models of the labor market are able to fit the wage distribution perfectly with longitudinal labor supply data, by estimating an appropriate distribution of labor productivity across firms. This paper formally compares such structural estimates to their directly observed counterparts in firm data. More generally, we investigate the extent to which these models are able to explain the observed distributions of wages, productivities and firm sizes across firms, as well as the extent to which they are able to explain the observed relationships between these variables across firms. The parameters that capture search frictions are estimated with worker data that are matched to the firm data. matched worker-firm data, mobility, productivity, firm size

Keywords: Equilibrium search, wages, structural econometrics,

JEL Classification: J64, J42, J31, C41

Suggested Citation

van Vuuren, Aico and van den Berg, Gerard J., Using Firm Data to Assess the Performance of Equilibrium Search Models of the Labor Market (June 2000). Tinbergen Institute Discussion Paper. Available at SSRN: https://ssrn.com/abstract=237618 or http://dx.doi.org/10.2139/ssrn.237618

Aico Van Vuuren (Contact Author)

Erasmus University Rotterdam (EUR) - Department of Economics ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands
+31 10 4082158 (Phone)
+31 10 4089149 (Fax)

Gerard J. Van den Berg

VU University Amsterdam - Department of Economics ( email )

De Boelelaan 1105
1081 HV Amsterdam
Netherlands
+31 20 444 6132 (Phone)
+32 20 444 6020 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Tinbergen Institute

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

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