Can the Mortensen-Pissarides Model with Productivity Changes Explain U.S. Wage Inequalities?

Wong, Linda Y.

doi:10.2139/ssrn.284146

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Can the Mortensen-Pissarides Model with Productivity Changes Explain U.S. Wage Inequalities?

34 Pages Posted: 2 Oct 2001

See all articles by Linda Y. Wong

Linda Y. Wong

University of Iowa - Henry B. Tippie College of Business - Department of Economics

Abstract

This paper examines whether the Mortensen-Pisssarides matching model with productivity changes can explain the time pattern of wage inequality. The main finding is that the model produces counter-factual results. The main source of failure seems to be the exogenous matching function and/or the exogenous surplus share, neither of which allows firms to use wage policies to direct workers' searches.

JEL Classification: J31, J64, C78

Suggested Citation: Suggested Citation

Wong, Linda Y., Can the Mortensen-Pissarides Model with Productivity Changes Explain U.S. Wage Inequalities?. Available at SSRN: https://ssrn.com/abstract=284146 or http://dx.doi.org/10.2139/ssrn.284146