A Cross-Country Comparison of Labor Market Frictions

51 Pages Posted: 10 Sep 2002

See all articles by Geert Ridder

Geert Ridder

University of Southern California

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 2002


In this paper we define and estimate measures of labor market imperfection in the context of an equilibrium search and matching framework. The method uses readily available data on distributions of unemployment and job durations and wages. We estimate an index of search frictions, the magnitude of structural and frictional unemployment, and the average monopsony power of firms, and we examine the effect of the minimum wage, unemployment benefits and search frictions on monopsony power. Estimation of some of the characteristics is invariant to the way in which wage determination is modeled. We perform separate empirical analyses for the USA, the UK, France, Germany and the Netherlands.

Keywords: Wages, search frictions, cross-country comparisons, unemployment, monopsony power, minimum wage, job search, mobility, productivity

Suggested Citation

Ridder, Geert and van den Berg, Gerard J., A Cross-Country Comparison of Labor Market Frictions (June 2002). USC CLEO Research Paper No. C02-15. Available at SSRN: https://ssrn.com/abstract=324960 or http://dx.doi.org/10.2139/ssrn.324960

Geert Ridder (Contact Author)

University of Southern California ( email )

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Gerard J. Van den Berg

VU University Amsterdam - Department of Economics ( email )

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Centre for Economic Policy Research (CEPR)

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IZA Institute of Labor Economics

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Tinbergen Institute

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