A job ladder model with stochastic employment opportunities. Issue 4 (11th November 2021)

• Record Type: Journal Article
• Authors: Bradley, Jake; Gottfries, Axel
• Is Part Of: Quantitative economics. Volume 12:Issue 4(2021)
• Page Start: 1399
• Page End: 1430
• Publication Date: 2021-11-11
• Subjects: On‐the‐job search -- wage dispersion -- wage posting -- stock‐flow; J31 -- J64; Economics, Mathematical -- Periodicals; Econometrics -- Periodicals; Economics -- Periodicals; 330.0151
• DOI: 10.3982/QE1394
• Languages: English
• ISSNs: 1759-7323

Abstract

Abstract : We set up a model with on‐the‐job search in which firms infrequently post vacancies for which workers occasionally apply. The model nests the standard job ladder and stock‐flow models as special cases, while remaining analytically tractable and easy to estimate from standard panel data sets. The parameters from a structurally estimated model on US data are significantly different from either the restrictions imposed by a stock‐flow or job ladder model. Imposing these restrictions significantly understates the search option associated with employment and are, unlike our model, inconsistent with recent survey evidence and declining job finding rates and starting wage with duration of unemployment, both of which are present in the data.