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Author: Gottfries, Axel
Resulting in 1 citation.
1. Gottfries, Axel
Teulings, Coen
Returns to On-the-job Search and the Dispersion of Wages
Discussion Paper No. CFM-DP2016-29, Centre for Macroeconomics, London, October 2016.
Also: http://www.centreformacroeconomics.ac.uk/Discussion-Papers/2016/CFMDP2016-29-Paper.pdf
Cohort(s): NLSY79
Publisher: Centre for Macroeconomics
Keyword(s): Job Search; Layoffs; Wages

Permission to reprint the abstract has not been received from the publisher.

A wide class of models with On-the-Job Search (OJS) predicts that workers gradually select into better-paying jobs, until lay-off occurs, when this selection process starts over from scratch. We develop a simple methodology to test these predictions. Our inference uses two sources of identification to distinguish between returns to experience and the gains from OJS: (i) time-variation in job-finding rates and (ii) the time since the last lay-off. Conditional on the termination date of the job, job duration should be distributed uniformly. Using extreme value theory, we can infer the shape of the wage-offer distribution from the effect of the time since the last lay-off on wages.

This methodology is applied to the NLSY 79. We find remarkably strong support for all implications.

Bibliography Citation
Gottfries, Axel and Coen Teulings. "Returns to On-the-job Search and the Dispersion of Wages." Discussion Paper No. CFM-DP2016-29, Centre for Macroeconomics, London, October 2016.