Labor Market Matching, Wages, and Amenities
This paper develops an equilibrium labor market model that jointly incorporates worker heterogeneity, firm heterogeneity, compensating differentials, search frictions, and Becker–type complementarities. We show that the primitives of the model are nonparametrically identified using matched employer–employee data. Unobserved heterogeneity can be recovered in the first stage in a fully model consistent way, making estimation very tractable. We apply the framework to Swedish administrative data and find substantial heterogeneity in worker preferences over firms, large non-pecuniary contributions to wage dispersion, and meaningful but imperfect sorting. Our estimates provide a structural interpretation of observed wage premia, mobility patterns, and sorting patterns in the data.
-
-
Copy CitationThibaut Lamadon, Jeremy Lise, Costas Meghir, and Jean-Marc Robin, "Labor Market Matching, Wages, and Amenities," NBER Working Paper 32687 (2024), https://doi.org/10.3386/w32687.Download Citation
-
-