Job dynamics, correlated shocks and wage profiles

We generalize the Mortensen-Pissarides (1994) model of the labor market with a more realistic structure for the stochastic process of the shocks to the worker-firm match. In this way we can acommodate the empirical observation that hazard rates of job termination decrease and average wages increase with job tenure. Besides being able to fit better some observables of the model, the changes we introduce are nontrivial for the analysis of policies as well.

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Year of publication:	1998-01
Authors:	Cabrales, Antonio ; Hopenhayn, Hugo
Institutions:	Department of Economics and Business, Universitat Pompeu Fabra
Subject:	Layoff costs \| search \| layoff hazard rates \| wage-tenure relationship

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Extent:	application/pdf
Series:	Economics Working Papers.
Type of publication:	Book / Working Paper
Language:	English
Classification:	J60 - Mobility, Unemployment, and Vacancies. General ; J30 - Wages, Compensation, and Labor Costs. General
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005772086