Search Intensity, Directed Search And The Wage Distribution

Bruno Decreuse (1) , André Zylberberg (2)

1 GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille
2 CES - Centre d'économie de la Sorbonne

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.

Mots clés: Search e¤ort; Segmented markets; Equilibrium wage dispersion

Domaines: Economies et finances

Bruno Decreuse, André Zylberberg. Search Intensity, Directed Search And The Wage Distribution. Journal of the European Economic Association, 2011, 9 (6), pp.20-38. ⟨10.1111/j.1542-4774.2011.01039.x⟩. ⟨halshs-00638150⟩