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Matching Frictions, Efficiency Wages, and Unemployment in the USA and the UK.

Abstract:

This paper combines matching frictions with efficiency wages to deter shirking in a model that is estimated for the USA and the UK to derive the underlying structural parameters. Methods robust to weak instruments are used to show that, for both countries, both matching frictions and efficiency wages play a signi…cant role in enabling the model to …t the data even with non-prescriptive formulations for wage determination. The results indicate that adding an efficiency wage element to matching...

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Publisher:
Department of Economics (Brown University)
Series:
Working Papers
Publication date:
2007-01-01
Language:
English
UUID:
uuid:68a37b85-a123-4842-bab2-c307967180cf
Local pid:
oai:economics.ouls.ox.ac.uk:11565
Deposit date:
2011-08-16

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