estimating a market equilibrium search model from panel data on individuals from albrecht and axell 1984 and is based on workers who are homogeneous in terms of market productivity and heterogeneous in terms of nonmarket productivity and on firms which are heterogeneous in terms of productive efficiency the equilibrium model is contrasted in terms of its fit to the data with an unrestricted version of the model which is based on a mixture of negative binomial distributions the equilibrium model fails to conform to the data in exactly the dimension of its major focus namely it implies that measurement error accounts for almost all of the dispersion in observed wages the equilibrium model also does not do well in fitting the unemployment duration distribution compared to the unrestricted model the problem is that the duration distribution itself does not support the existence of significant heterogeneity as evidenced by the estimates of the unrestricted model the paper also illustrates the use of such models for policy analysis by simulating the welfare effects of a minimum wage

maximum likelihood estimation of search costs abstract in a recent paper hong and shum 2006 using price distributions to estimate search costs rand journal of economics 37 257 275 present a structural method to estimate search cost distributions we extend their approach to the case of oligopoly and present a new maximum likelihood method to estimate search costs we apply our method to a data set of online prices for different computer memory chips the estimates suggest that the consumer population can be roughly split into two groups which either have quite high or quite low search costs search frictions confer a significant amount of market power to the firms despite more than 20 firms operating in each of the markets we estimate price cost margins to be around 25 the paper also illustrates how the structural method can be employed to simulate the effects of the introduction of a sales tax

the non optimality of proposed monetary policy rules under timeless perspective commitment abstract in a near canonical forward looking model the timeless perspective form of commitment typically provides outcomes that are on average superior to those resulting from discretion the specific condition that appears in the literature is however not optimal from the relevant perspective

relative efficiencies and comparative advantages in job search a model of employed and unemployed job search is estimated from a panel of new entrants into the labor force as well as prime age workers after investigating the relative efficiency of the two mai

openness imperfect exchange rate pass through and monetary policy abstract this paper analyses the implications of imperfect exchange rate pass through for optimal monetary policy in a linearised open economy dynamic general equilibrium model calibrated to euro area data imperfect exchange rate pass through is modelled by assuming sticky import price behaviour the degree of domestic and import price stickiness is estimated by reproducing the empirical identified impulse response of a monetary policy and exchange rate shock conditional on the response of output net trade and the exchange rate it is shown that a central bank that wants to minimise the resource costs of staggered price setting will aim at minimising a weighted average of domestic and import price inflation

an equilibrium model of search unemployment this paper develops a simple general equilibrium model with sequential search in which a nondegenerate wage offer distribution is endogenously determined we use this model to analyze the comparati

frictional wage dispersion in search models a quantitative assessment we propose a new measure of frictional wage dispersion the mean min wage ratio for a large class of search models we show that this measure is independent of the wage offer distribution but depends on statistics of labor market turnover and on preferences under plausible preference parameterizations observed magnitudes for worker flows imply that in the basic search model and in most of its extensions frictional wage dispersion is very small notable exceptions are some of the most recent models of on the job search our new measure allows us to rationalize the diverse empirical findings in the large literature estimating structural search models

an econometric analysis of reservation wages this paper describes an analysis of survey data on unemployed people who reported their asking wage and the wage they expected to earn we show that if agents behavior is described by the standard optimal job search model one can use these data to deduce structural parameters rather than estimate them and we report our deductions from two surveys 1 of british unemployed people

solution and estimation of re macromodels with optimal policy macro models of monetary policy typically involve forward looking behavior except in rare circumstances we have to apply some numerical method to find the optimal policy and the rational expectations equilibrium this paper summarizes a few useful methods and shows how they can be combined with a kalman filter to estimate the deep model parameters with maximum likelihood simulations of a macro model with staggered price setting interest rate elastic output and optimal monetary policy illustrate the properties of this estimation approach

estimating a structural search model the transition from school to work this paper presents a finite horizon search model that is econometrically implemented using all of the restrictions impli ed by the theory following a sample of male high school graduates fr om the youth cohort of the national longitudinal surveys from graduat ion to employment search parameters are estimated reservation wages and offer probabilities are estimated to be quite low simulations a re performed of the impact of changing the parameters on the expected duration of unemployment copyright 1987 by the econometric society

race space and unemployment duration abstract this paper employs a special geo coded tabulation of the us panel study of income dynamics psid to examine the link between racial differences in residential location or residential segregation and racial disparities in unemployment durations for a sample of 1098 workers whose employment was terminated during the years 1990 through 1992 we estimate continuous time duration models explaining unemployment durations for recently unemployed individuals as a function of personal and household characteristics affecting worker productivity residential location characteristics at the time of job termination and measures of job accessibility we find that residential segregation affects racial differences in unemployment durations by exacerbating racial differences in job accessibility and neighborhood peer effects

job and wage mobility with minimum wages and imperfect compliance we propose a job search model with minimum wage regulations and imperfect compliance to explain the doubling of the mean and variance of hourly earnings of white males during the first 18 years of labor market experience the model encompasses job mobility and on the job wage growth as sources of wage dynamics and is estimated by simulated generalized method of moments using data from the national longitudinal survey of youths 1979 our estimates provide a good fit for the observed levels and trends of the main job and wage mobility data and for the increase in the mean and variance of wages over the life cycle as well as for the fall in the fraction of workers paid below the minimum wage job mobility explains 40 50 of the observed wage growth increases in the minimum wage and or compliance deliver small effects on the wage distribution and the nonemployment rate

equilibrium price distributions equilibrium price distributions for a homogeneous product consistent with individual incentives are investigated they arise in informationally imperfect markets in which the only primitive datum is the distribution of search costs it is shown that single multi and continuous price distributions are all viable long run phenomena depending on the nature of search costs a method for computing equilibrium price distributions is also provided jevons law of one price has long been an accepted dictum in economic theory in a classroom presentation it still serves sometimes implicitly as a major premise in many micro models of market interaction much of the descriptive theory as well as welfare analysis hinges on this assumption yet one s day to day experience reveals that price differentials are a viable phenomenon and that looking for lower prices may very well be a rewarding activity the prospects of eventually hitting a bargain and the resulting price reduction would more than compensate for the cost incurred during the search process moreover the existence of price dispersions appear to be an empirically stable phenomenon snapshots of markets for relatively homogeneous products reveal substantial and recurring price differentials stigler 1961 and pratt wise and zeckhauser 1979 for example report some evidence supporting this claim an important article by stigler 1961 focused economists attention on the crucial role played by the informational structure of markets it gave rise to the study of the

estimation of equilibrium wage distributions with heterogeneity summary equilibrium search models generalize the one sided models used earlier by endogenizing the wage offer distribution attempts to estimate versions of these equilibrium n search models have been unsuccessful ironically because the predicted wage distribution did not fit the wage data in this paper we extend the applicability of search models by introducing firm heterogeneity to account for the shape of the wage density the resulting estimation problem is difficult but we propose a solution and illustrate its feasibility and performance with a monte carlo study and an application to us labour market data

an estimable dynamic stochastic model of fertility and child mortality this paper develops a finite horizon dynamic stochastic model of discrete choice with respect to life cycle fertility within an environment where infant survival is uncertain the model yields implications for the number timing and spacing of children a tractable estimation method is developed for the linear constraint quadratic utility case that is intimately tied to the dynamic optimization problem and the method is applied to malaysian household data estimation is based on integrating the numerical solution of the dynamic programming model of behavior with a maximum likelihood procedure

multiple equilibria and minimum wages in labor markets with informational frictions and heterogeneous production technologies it is often argued that a mandatory minimum wage is binding only if the wage density displays a spike at it in this article we analyze a model with search frictions and heterogeneous production technologies in which imposition of a minimum wage affects wages even though after imposition the lowest wage in the market exceeds the minimum wage the model has multiple equilibria as a result of the fact that the reservation wage of the unemployed and the lowest production technology in use affect each other imposition of a minimum wage may improve social welfare

job accessibility and female employment probability the cases of barcelona and madrid the objective of this paper is to estimate the impact of residential job accessibility on female employment probability in the metropolitan areas of barcelona and madrid following a spatial mismatch framework a female employment probability equation is estimated which includes variables controlling for personal characteristics residential segregation and employment potential by public transport network data used come from the micro census 2001 of ine the national institute of statistics the research focuses on the treatment of endogeneity problems and the measurement of accessibility variables the results show that low job accessibility in public transport negatively affects employment probability the intensity of this effect tends to decrease with individual s educational attainment a higher degree of residential segregation also reduces job probability in a significant way

car ownership employment and earnings abstract we assess whether the positive relationship between car ownership and employment outcomes reflects a causal effect of auto ownership we match state level data on car insurance premiums and gas taxes to a microdata sample containing information on car ownership and employment outcomes in ols regressions that control for observable covariates we find large differences in employment rates weekly hours worked and hourly earnings between those with and without cars instrumenting for car ownership with insurance and gas taxes yields estimates of the employment and hours effects that are quite close to the ols estimates concerning wages instrumenting eliminates the positive impact of auto ownership

job access employment and earnings outcomes for welfare leavers in a us urban labour market this article examines the effect of job access on employment outcomes for welfare recipients in cleveland ohio leaving assistance during 1998 2000 a rich longitudinal dataset is employed combining administrative and survey data with multiple measures of access to and competition for jobs the focus is on both a population and a range of measures of employment outcomes not previously studied in this context empirical ambiguity in the existing literature has resulted from the difficulty of modelling causality when employment and residential location are jointly determined in this study labour market outcomes are related to the residential locations of welfare leavers prior to employment thus overcoming much potential endogeneity virtually no evidence is found that job access influences labour market outcomes for this population

dynamic labour force participation of married women and endogenous work experience this paper presents and estimates a dynamic model of married women s labour force participation and fertility in which the effect of work experience on wages is explicitly taken into account because current participation alters future potential earnings the investment return to work will be an important factor in the current work decision in any forward looking behavioural model the model is estimated using the national longitudinal surveys mature women s cohort we use the estimates of our model to predict changes in the lifecycle patterns of employment due to changes in schooling fertility husband s income and the magnitude of the experience effect on wages we find that although work experience increases the disutility of further work the effect is overwhelmed by the positive effect of experience on wages leading to persistence in the employment patterns of these women in addition we find that an increase in young children and in husband s income substantially reduces participation while increased schooling has a powerful positive impact on participation this paper presents an estimable structural dynamic model of married women s labour force participation and fertility in which wages are stochastic and work experience or cumulative participation is endogeneous the model is structural in the sense that the parameters which are estimated are contained in the fundamental relationships governing behaviour namely the utility function and the constraints the model is contained in the class of models which describe the life cycle capital accumulation process with endogeneous labour supply such as weiss 1972 and heckman 1976 it is closest in spirit to that of weiss and gronau 1981 1 the basic feature of their model and ours is that labour market participation affects future wages which then affects future participation the investment return to current work will necessarily be taken into account in any forward looking optimizing model as weiss and gronau note estimates of labour supply models have ignored the inherent behavioural dynamics associated with a positive wageexperience profile there is no adequate empirical treatment of the human capital investment dimension of the labour force participation decision in the literature heckman and willis 1977 have studied a sequential discrete choice model of the labour force participation of married women in a reduced form framework their work

optimal interest rate smoothing this paper considers the desirability of the observed tendency of central banks to adjust interest rates only gradually in response to changes in economic conditions it shows in the context of a simple model of optimizing private sector behaviour that assignment of an interest rate smoothing objective to the central bank may be desirable even when reduction of the magnitude of interest rate changes is not a social objective in itself this is because a response of policy to irrelevant lagged variables may be desirable owing to the way it steers private sector expectations of future policy

an optimizing is lm specification for monetary policy and business cycle analysis we ask whether relations of the is lm type can sensibly be used for the aggregate demand portion of a dynamic optimizing general equilibrium model intended for analysis of issues regarding monetary policy and cyclical fluctuations the main result is that only one change the addition of a term regarding expected future income is needed to make the is function match a fully optimizing model whereas no changes are needed for the lm function this modification leads to a dynamic forward looking model of aggregate demand that is tractable and usable with a wide variety of aggregate supply specifications theoretical applications concerning price level determinacy and gradual price adjustment are included

the spatial mismatch hypothesis some new evidence this paper uses commuting times and distance data from the nationwide personal transportation studies of 1977 to 1983 4 to re evaluate the spatial mismatch hypothesis neither minorities nor low income workers have longer commutes in fact their commuting patterns are very similar to those of workers in general this also implies that minorities are not constrained by income or housing to live closer to work however women consistently have shorter worktrips the spatial mismatch hypothesis receives no support from examination of commuting data

patents as options some estimates of the value of holding european patent stocks in many countries holders of patents must pay an annual renewal fee in order to keep their patents in force this paper uses data on the proportion of patents renewed and the renewal fees faced by post world war ii cohorts of patents in france the united kingdom and germany in conjunction with a model of patent holders renewal decisions to estimate the returns earned from holding patents in these countries since patents are often applied for at a nearly stage in the innovation process the model allows agents to be uncertain about the sequence of returns that will be earned if the patent is kept inforce formally then the paper presents and solves a discrete choice optimal stochastic control model derives the implications of the model on aggregate behaviour and then estimates the parameters of the model from aggregate data the estimates enable a detailed description of the evolution of the distribution of returns earned from holding patents over their life spans and calculations of both the annual returns earned from holding the patents still in force or the patent stocks in the alternative countries and the distribution of the discounted value of returns earned from holding the patents in a cohort this abstract was borrowed from another version of this item

transit mobility jobs access and low income labour participation in us metropolitan areas summary while policy makers assert that increased public transit mobility can positively affect employment status for low income persons there is little empirical evidence to support this theory it is generally assumed that public transit can effectively link unemployed car less persons with appropriate job locations hence the call for more public transit services to assist moving welfare recipients to gainful employment thus far the available evidence is anecdotal while general patterns of transit access in relationship to labour participation remain relatively unexplored this analysis examines whether increased transit access is associated with the case status employment status of temporary assistance for needy families tanf recipients in the atlanta georgia baltimore maryland dallas texas denver colorado milwaukee wisconsin and portland oregon metropolitan areas individual tanf recipient location data transit route stop data and employment location data were used in limited dependent variable regression analyses to predict the employment status of tanf recipients the results of this analysis indicate that access to fixed route transit and employment concentrations had virtually no association with the employment outcomes of tanf recipients in the six selected metropolitan areas

a note on timeless perspective policy design working with a typical macroeconomic model we investigate the potential superiority or otherwise of timeless perspective tp policy design we show that when fiscal policy matters the timeless perspective policy design can cause instability

search for nonwage job characteristics a test of the reservation wage hypothesis previous structural models of job search behavior have been based upon the reservation wage property this article provides estimates of a more general search model that nests models with the reservation wage property the estimates lead to rejection of the reservation wage property the model includes hours of work in the utility function but other nonwage job characteristics can be included as well an experiment based on the estimated parameters indicates that a significant proportion of job offers would be mistakenly predicted to be accepted or rejected under the restrictions implied by the reservation wage property