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Search Intensity, Directed Search And The Wage Distribution

Abstract : We propose a search equilibrium model in which homogenous …rms post wages along with a vacancy to attract job-seekers, while homogenous unemployed workers invest in costly job-seeking. The key innovation relies on the organization of the search market and the search behavior of the job-seekers. The search market is continuously segmented by wage level, individuals can spread their search investment over the di¤erent sub-markets, and search intensity has marginal decreasing returns on each sub-market. We show that there exists a non-degenerate equilibrium wage distribution. The density of this wage distribution is increasing at low wages, and decreasing at high wages. Under additional restrictions, it is hump-shaped, and it can be right-tailed. Our results are illustrated by an example originating a Beta wage distribution.
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Contributor : André Zylberberg <>
Submitted on : Friday, November 4, 2011 - 7:35:25 AM
Last modification on : Tuesday, January 19, 2021 - 11:08:28 AM
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  • HAL Id : halshs-00638150, version 1

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Bruno Decreuse, André Zylberberg. Search Intensity, Directed Search And The Wage Distribution. Journal of the European Economic Association, Wiley, 2011, 9 (6), pp.20-38. ⟨halshs-00638150⟩

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