Paper #260

Título:

Job dynamics, correlated shocks and wage profiles

Autores:

Antonio Cabrales y Hugo Hopenhayn

Fecha:

Enero 1998

Resumen:

We generalize the Mortensen-Pissarides (1994) model of the labor market with a more realistic structure for the stochastic process of the shocks to the worker-firm match. In this way we can acommodate the empirical observation that hazard rates of job termination decrease and average wages increase with job tenure. Besides being able to fit better some observables of the model, the changes we introduce are nontrivial for the analysis of policies as well.

Palabras clave:

Layoff costs, search, layoff hazard rates, wage-tenure relationship

Códigos JEL:

J60, J30

Área de investigación:

Microeconomía

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