Simulating Hedonic Labor Market Models: Computational Issues and Policy Applications.

This research demonstrates that much useful quantitative information concerning hedonic labor market equilibrium and the effects of disturbances to it can be obtained through the use of numerical simulation analysis. In particular, the authors (1) explore the general problems involved in numerically simulating hedonic labor market equilibrium; (2) determin e the sensitivity of wages to changes in the parameter values of the underlying structural equations; and (3) examine the labor market and economic welfare implications of some straightforward policy alternatives, including a tax on the firm based on its industrial injury experience. Copyright 1988 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.